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Congratulations! You won the lottery. You have a choice of 2 payout structures: Option 1: $200,000 per year forever. The first payment is today. Option
Congratulations! You won the lottery. You have a choice of 2 payout structures:
Option 1: $200,000 per year forever. The first payment is today.
Option 2: $55,000 every 3 months (quarterly) forever. The first payment is 3 months from today.
If the appropriate discount rate is 8.0000% EAR, what is the present value of each option?
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