1. You recently won the lottery for $100,000,000 and found out that they will pay you $5,000,000 per year for 20 years. Assume that the payments will be made to a tax shelter that you had previously set up and that no income taxes will be payable. If the discount rate that is reasonable is 3%, what is the present value of this annuity stream?

1. They alsoofferyou $75,000,000 in cash instead of the income stream, if you wish, in your tax shelter. Which is the better choice?