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As the winner of the Housecleaners sweepstakes, you are entitled to one of the following prizes: A. $999,999 immediately. B. $100,000 per year forever. C.
As the winner of the Housecleaners sweepstakes, you are entitled to one of the following prizes:
A. $999,999 immediately.
B. $100,000 per year forever.
C. $180,000 per year for the next 10 years starting immediately.
D. $400,000 payable every 2 years over 20 years.
E. $39,000 next year growing by 6% forever.
In terms of present values, which prize should be chosen if r = 9%? What is the value of each of the options?
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