Earlier this week the big game lottery jackpot hit $351 million. The winners will get 13.5 million a year for 26 years (with the first payment at time zero) but the winners will have to pay income taxes. After taxes if there is a single winning ticket the winner can a one time payoff of $114 million or $89million a year for 26 years (with the first payment at time zero) Please show work

a) What is the embedded rate of return associated with the two alternative modes of payoff?

b) Assume you won the Big Game Lottery and wanted a payoff over time. If you thought you could earn 5 percent after tax on invested funds, would you rather take the one-time $114 million or the 8.9 million per year? Why?