You won the lottery and have a number of choices as to how to take the money. Which choice yields a greater present value? Present Value of $1
Present Value of Annuity of $1
A) $12,000 a year at the end of each of the next 6 years using a 6% discount rate
B) $53,500 (lump sum) now using a 6% discount rate
C) $90,000 (lump sum) 7 years from now using a 6% discount rate
D) $92,000 (lump sum) 7 years from now using an 8% discount rate
Correct Answer:
Verified
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