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Daniel has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $134,000 cash payment
Daniel has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $134,000 cash payment today. The second option is to receive $23,400 at the end of each of the next 19 years and a $27,300 lump sum payment in the 20 th year. Daniel can invest money at a 10% rate. Click here to view the fasmor table. (a) Calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Which option should Daniel choose to receive his winnings? (b) If Daniel could invest money at 13%, calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)
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