CHAPTER 9: TIME VALUE ANALYSIS Homework 4.4, Chapter 9 a. Assume that you just S30 million in the Texas lottery, and hence the state will pay you 20 annual payments of S1.5 million at the end of each year. If the rate of return on securities of similar risk to the lottery earning (e.g., the rate on 20-year U.S. Treasury bonds) is 5%, what is the present value of your winnings? Option 1: a lump sum payment of S30 million up front -Option 2: 20 annual payments of $1.5 million b. Considering this, which option should you take? Explain your