Question
Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $360,000 per
Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $360,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 5% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives?
A. $5,073,818
B. $5,687,510
C. $5,327,510
D. $9,000,000
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
