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You have just won the lottery and will receive $500,000 in one year. You will receive payments for 22 years, which will increase 4 percent

You have just won the lottery and will receive $500,000 in one year. You will receive payments for 22 years, which will increase 4 percent per year. The appropriate discount rate is 10 percent.

Required:

What is the present value of your winnings?

Multiple Choice

$5,907,208
$5,670,920
$20,290,274
$20,290,274

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