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Congratulations! You are the 50th student to read this problem. You just won the $100m business school jackpot lottery. The schools lawyer reaches out to
Congratulations! You are the 50th student to read this problem. You just won the $100m business school jackpot lottery. The schools lawyer reaches out to you about how you would like to receive your payment. He says they normally give people the $100m up front, but since the school is having liquidity issues, he got special approval from the schools treasurer to cut you a better deal. He tells you the alternative option would be to give you $5,000,000 per year, forever. Is this actually a better deal? Assume an 8% discount rate
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