Question
In December 2012, a retired waitress in Massachusetts won a lottery of $5.6 million.They can either give her a lump sum of $5.6 million or
In December 2012, a retired waitress in Massachusetts won a lottery of $5.6 million. They can either give her a lump sum of $5.6 million or pay her $320,000 immediately and then $320,000 per year for the next 19 years. The time value of money to her is 8 percent. What choice will she make and why? (Ignore the tax effect).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine which option the retired waitress should choose we need to compare the present value of ...
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Contemporary Engineering Economics
Authors: Chan S. Park
5th edition
136118488, 978-8120342095, 8120342097, 978-0136118480
