Question
You won a Cash For Life lottery that pays you (or your estate) $1000 per year forever, starting in one year. The discount rate is
You won a Cash For Life lottery that pays you (or your estate) $1000 per year forever, starting in one
year. The discount rate is 5% per year for the first 3 years, thereafter the discount rate drops to 3%
forever. All else being the same, how much would you be willing to sell your winnings for today if
given a lump sum option?
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
