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You have just won the state lottery and have two choices for collecting your winnings. You can collect $100,000 today or receive $20,000 at
You have just won the state lottery and have two choices for collecting your winnings. You can collect $100,000 today or receive $20,000 at the end of each year for the next seven years. A financial analyst has told you that you can earn 10% on your investments. Required: 1. Calculate the present value of both the options. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Present Value Option 1 Option 2 2. Which alternative should you select? Option 1 Option 2
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