How much is an oil well worth today if it will pay royalties of $25,000 per year at the end of the next 12 years and will be sold for $250,000 at the end of the 12th year? Assume that the interest rate is 8% compounded quarterly.
a. $287,680.39
b. $863,462.39
c. $2,405,598.66
d. None of the answers are correct