You Are Considering Two Lottery Payment Streams

question 106

Essay

You are considering two lottery payment streams. Choice A pays $1,000 today and choice B pays $1,750 at the end of five years from now. Using a discount rate of 5%, based on present values, which would you choose? Using the same discount rate of 5%, based on future values, which would you choose? What do your results suggest as a general rule for approaching such problems? (Make your choices based purely on the time value of money.)

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Definitions:

Strategic Self-Presentation

The process of carefully controlling the image or impression one conveys to others, often to achieve specific goals or manipulate how one is perceived.

Expressive Self-Presentation

The process of communicating one's thoughts, feelings, and individuality to others through verbal and non-verbal actions.

Acquired Immunodeficiency Syndrome

A chronic, potentially life-threatening condition caused by the human immunodeficiency virus (HIV) which damages the immune system.

Negligence

A medical professional’s failure to perform an essential action or performance of an improper action that directly results in the harm of a patient.