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Jacques just won the lottery and must choose between three award options: 1. A lump sum of $15,000,000 received today 2. 15 end-of-year payments of

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Jacques just won the lottery and must choose between three award options: 1. A lump sum of $15,000,000 received today 2. 15 end-of-year payments of $1,875,000 3. 40 end-of-year payments of $1,350,000 For each option in the table, indicate which values to enter for each variable in your financial calculator Option 1 Lump Sum Payment Option 2 15 Payments Option 3 40 Payments No. of Periods Annual payment Future Value Present Value FV-0 2 FV-0 7 $15,000,000 Assume the interest rate is 8.00%, entered as 8 on your financial calculator Note: Take the absolute value of the present value when answering this question Using the table you just filled out, along with a financial calculator, yields a present value for option 2 of approximately and a present value for option 3 of approximately (when the interest rate is 8.00%). Based on this, Jacques should choose option if he seeks to maximize present value. Now assume the interest rate is 9.00%, entered as 9 on your financial calculator Now assume the interest rate is 9.00%, entered as 9 on your financial calculator Note: Take the absolute value of the present value when answering this question. Using the table you just filled out, along with your financial iculator, yields a present value for option 2 of approximately and a present value for option 3 of approximately (when the interest rate is 9.00%). Based on this, Jacques should choose option if he seeks to maximize present value. Assume the interest rate is 10.00%, entered as 10 on your financial calculator Note: Take the absolute value of the present value when answering this question and Using the table you just filled out, along with your financial calculator, vields a present value for option 2 of approximately a present value for option 3 of approximately (when the interest rate is 10.00%). Based on this, Jacques should choose option If he seeks to maximize present value. As the interest rate increases, option 1 becomes attractive

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