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You Won the Lottery and Have a Number of Choices

Question 27

Multiple Choice

You won the lottery and have a number of choices as to how to take the money. Which choice yields a greater present value? Note: Present value and future value tables are needed


A) $10,000 a year at the end of each of the next 6 years using a 6% discount rate
B) $60,000 (lump sum) now using a 6% discount rate
C) $90,000 (lump sum) 7 years from now using an 6% discount rate
D) $90,000 (lump sum) 7 years from now using an 8% discount rate

Correct Answer:

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