Present Value Analysis
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You recently won the lottery and you were given the followin goptions for your payout of $1 million dollars.
Option 1 - You could receive $50,000 dollars a year until you reach the total payout of $1 million dollars.
Option 2 - You could take $450,000 now.
Option 3 - You could receive $100,000 now and receive an additional $500,000 in 8 years.
Using the annual rate of 10% annually, which option would you choose? Would you change your answer if the rate was 7%?
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I would recommend that you use a financial ...
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