The correct answer is B. $44,218.

Explanation:

1. Step 1: Calculate the present value of the annuity in Year 4.
   • The annuity is an ordinary annuity with 7 payments of $10,000 each, discounted at 6%.
   • The formula for the present value of an ordinary annuity is: $PV = A \left[ \frac{1 - \frac{1}{(1 + r)^N}}{r} \right]$
   • Substituting the values: $$ PV_4 = 10,000 \left[ \frac{1 - \frac{1}{(1 + 0.06)^7}}{0.06} \right] = 55,823.81 $`$2`. Step 2: Discount the Year 4 value back to today (Year 0).
   • The present value today is calculated by discounting the Year 4 value for 4 years: $PV_0 = PV_4 \times (1 + r)^{-4}$ $$ PV_0 = 55,823.81 \times (1 + 0.06)^{-4} = 44,217.89 \approx 44,218 $`$3`. Calculator Solution:
   • Step 1: END mode; N = 7; I/Y = 6; PMT = -10,000; FV = 0; solve for PV = 55,823.81.
   • Step 2: END mode; N = 4; I/Y = 6; PMT = 0; FV = -55,823.81; solve for PV = 44,217.89.

Why not A or C?

• A ($41,715): Incorrectly discounts the annuity from Year 5 instead of Year 4.
• C ($55,824): Represents the value of the annuity in Year 4, not today.