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Suppose you are the Chief Economist of a local prestigious corporation. Suppose that the corporation has just won a court case about property rights infringement.
Suppose you are the Chief Economist of a local prestigious corporation. Suppose that the corporation has just won a court case about property rights infringement. The court has awarded the sum of $30 million to your company to be paid by the defendant. Your company is offered the option to either receive a one-time payment of $15 million today or 30 payments of $1 million per year, starting today. Which option would you recommend, assuming that the current risk-free interest rate is 8%? Why?
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