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Show all work including tables with cash flows and calculations Let's dream together. Lets say we win the lottery, 90 million. The way the lottery
Show all work including tables with cash flows and calculations
Let's dream together. Lets say we win the lottery, 90 million. The way the lottery works, those 90 million will be paid to you in equal payments for 30 periods. (we are not considering the 40 percent tax bite) The first payment happens today. You have the option to take the money as a lump sum equal to the present value of the cash flows using a discount rate equivalent the the rate on 30 year bonds at 4%.
- What is the lump sum that is offered by the lottery?
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