A $400,000 state lottery prize is spread evenly over eight years ($50,000 a year) (Alternative 1), or you may take a lump distribution of $263,000 (Alternative 2). If you can earn 8 percent, calculate the present values of both alternatives. Use Appendix D to answer the question. Round your answers to the nearest dollar.

PV (Alternative 1): $ .........?

PV(Alternative 2): $ .......?

Which alternative is better? -Select : Alternative 1/alternative 2

appendix D

Interest Factors for the Present Value of an Annuity of One Dollar