FINANCE: Several years ago, I bought a Lottery ticket at the neighborhood Gas Station. The jackpot at the time I bought the ticket was advertised as $170 million. In smaller print the estimated cash value was stated as $118.1 million. No other information was available. Some investigation on the Lottery website revealed that the exact amounts would be determined when someone won the jackpot. The smaller amount represented the amount the winner would get if he (or she) elected to take all of the cash immediately. The larger number represented the total amount received if the winners selected an annuity of thirty annual payments. The winner would get the first payment immediately and then an annual payment (which would increase annually) for the next 29 years.

If you were lucky enough to win the Lottery, what factors would you consider when making the choice between taking the cash immediately or selecting the annuity? Which would you choose?

Please tie your answer to the context from Finance Chapter 6 (Discounted Cashflow Valuation)