Suppose that in their divorce settlement, Mr. Billy offers Mrs. Melly to receive $1 million at the end of each year for

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Suppose that in their divorce settlement, Mr. Billy offers Mrs.
Melly to receive $1 million at the end of each year for a period of
5 years, but she instead demands $3 million now. 1. What’s the
Formula of the present value of a stream (of payments)? 2. Using
the formula from question 1, determine the present value of a
stream of future annual payments of $1 million over a period of 5
years. Assume the discount rate is 8%. 3. Based on your answer from
question 2, was the decision of Mrs. Melly to receive $3 million
now a good decision? Explain your answer!