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You won a lottery worth $1 million. You have 2 choices on how to receive it: Option A: Receive $1 million immediately and be taxed
You won a lottery worth $1 million. You have 2 choices on how to receive it: Option A: Receive $1 million immediately and be taxed at 40%. Option B: Receive $100,000 each year for next 10 years at the end of each year, being taxed every year at 20%. Your required rate of return is 10%. Which option would you prefer? Option B Both are equally attractive Option A
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