WINNING THE LOTTERY! Toni won the Washington State Lottery. She was given three options for receiving her winnings. Toni uses a discount rate of 10% in making her decision. Score: 4 /19 PV at 10% 0 on 1 Receiving $1.1 million at the end of five years. 682,990 Check 1 PV at 10% 682990 1100000 758160 200000 200000 200000 200000 200000 751300 1000000 Show cash flow each year, even if it's 0. 4 5 Cash flows 0 1 2 3 4 5 on 2 Receiving $200,000 per year for 5 years. 758,160 Cash flows Check PV at 10% 0 on 3 Receiving $1 million at the end of 3 years. 751,300 Check 1 stion: Which option should Toni choose to maximize her present value? wer: 2. Receiving $200,000 per year for 5 years. 1 4 5 + Cash flows PRESENT VALUE OF $1.00 PRESENT VALUE OF A SERIES OF $1.00 CASH FLOWS Per. 4% 6% 1 0.9615 0.9434 8% 0.9259 9% 10% 11% 12% 0.9174 0.9091 0.9009 0.8929 15% 0.8696 Per. 4% 1 0.9615 6% 0.9434 8% 9% 10% 11% 12% 15% 0.9259 0.9174 0.9091 0.9009 0.8929 0.8696 2 0.9246 0.89 0.8573 0.8417 0.8264 0.8116 0.7972 0.7561 2 1.8861 1.8334 1.7833 1.7591 1.7355 1.7125 1.6901 1.6257 3 0.889 0.8396 0.7938 0.7722 0.7513 0.7312 0.7118 0.6575 3 2.7751 2.673 2.5771 2.5313 2.4869 2.4437 2.4018 2.2832 4 0.8548 0.7921 0.735 0.7084 0.683 0.6587 5 0.8219 0.7473 0.6806 0.6499 0.6209 0.5935 0.6355 0.5718 0.5674 4 3.6299 3.4651 3.3121 3.2397 3.1699 3.1024 3.0373 2.855 0.4972 5 4.4518 4.2124 3.9927 3.8897 3.7908 3.6959 3.6048 3.3522