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Question 2 Thi-State Megabucks Lottery advertises a $10 million grand prize. The winner recelves $500,000 today and 19 annual payments of $500,000. A lump-sum option

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Question 2 Thi-State Megabucks Lottery advertises a $10 million grand prize. The winner recelves $500,000 today and 19 annual payments of $500,000. A lump-sum option of $5 milion payable imenediately is also availabie. 2a. Suppose you won the lottery, what tactors should you take into account in deciding whether you should take the annuity option or the lump-sum option? 2b. If there is another annuity option with 10 annual paymonts, how much wil tho wirnor recoive? Why? (Hint: calculate the discount rate first by assuming the annuity of $500,000 has a present value equal to $5 million)

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