Question
Congratulations - you have just won the lottery! You have won $50 million dollars and have two options to collect your money. Option 1 -
Congratulations - you have just won the lottery! You have won $50 million dollars and have two options to collect your money. Option 1 - Take all in lump sum, but you only get $20 million Option 2 - Take all the money over ten years ($2 million per year) Assuming the following, which gives you more money at the end of 10 years. Show all work!!! Assumptions: 1. Tax rate is 30% on everything! 2. The investment rate is 4% 3. You spend 50% of the money after taxes. 4. Assume you are to pay taxes upon award of the lottery money, and pay taxes on any interest at the end of the year.
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