Present Value of Annual Cash Flows
You win the lottery for $20 million! You have a choice to take $1 million now and $1 million for the next 19 years OR take $10.6 million today. Assume you expect to earn 6% on your investments. Hint: You are actually comparing a 19 year annuity @ $1 million a year vs. $9.6 million ($10.6 minus $1). You need to find out wh