C6 Option #1: 1 Capital Investment Decisions and the Time Value of Money 2 Choosing a lottery payout option Congratulations! You've won a state lotto! The state lottery offers you the following (after 4 tax) payout options: Option #1: Option #2 Option #3: $14,500,000 six years from now $2,200,000 at the end of each year for the next six years $12,500,000 four years from now 10 Use the blue shaded areas on the ENTERANSWERS tab for inputs Always use cell references and formulas where appropriate to receive full credit. If you 11 copy/paste from the Instruction tab you wil be marked wrong 12 13 Requirement 14 Assuming that you can earn 6% on your funds, which option would you prefer? a. For each of the three Options, use a single Excel formula function PV b. Make sure all answers are positive values 17 (Always use cell references and formulas where appropriate to receive full credit 3 | Option #1: 4 5 | Option #2: 7 Option #3: 9 Which option would you prefer? 10