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Congratulations you have just won a $ 2 million lottery. The prize is spread out over twenty annual payouts beginning today. But don t forget

Congratulations you have just won a $2 million lottery. The prize is spread out over twenty annual payouts beginning today. But dont forget about taxes. Assume a combined state and federal flat tax rate of 30 percent of each payment is withheld when paid. Now, you discover the average life expectancy in the United States is declining and you decide that you cant wait twenty years. You are offered $900,000 for your lottery winnings. Do you accept the offer? Assume an annual interest rate of 5 percent.

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