You win the lottery and must decide how to take the payout. Use an 8% discount rate for all parts of this question.
Present Value of $1
Present Value of Annuity of $1
Required:
a. What is the present value of $12,000 a year received at the end of each of the next six years?
b. What is the present value of taking a $60,000 lump sum now?
c. What is the present value of a $90,000 lump sum taken in 7 years?
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