Three different plans were presented to the GAO by a high-tech facilities manager for operating an identity-theft scanning facility. Plan A involves renewable 1-year contracts with payments of $1 million at the beginning of each year. Plan B is a 2-year contract that requires four payments of $600,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3-year contract that entails a payment of $1.5 million now and a second payment of $0.5 million 2 years from now. Assuming that the GAO could renew any of the plans under the same payment conditions, which plan is best on the basis of a present worth analysis at an interest rate of 6% per year compounded semiannually?
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