Question
Isabelle Salehoun won a lottery!!! She has a choice of two ways to get paid her winnings: $1 million today, or $40,000 end of every
- Isabelle Salehoun won a lottery!!! She has a choice of two ways to get paid her winnings:
- $1 million today, or
- $40,000 end of every year for life. An insurance company guarantees the payments.
- $1 million today, or
- $40,000 end of every year for life. An insurance company guarantees the payments.
If she expects to earn 3.8% on her investment of the $1 million and her average life expectancy is 60 years from today, which payment method is worth more?
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Cost Management A Strategic Emphasis
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
6th Edition
78025532, 978-0077523732, 77523733, 978-0078025532
