Suppose You Have a Winning Lottery Ticket and You Have

question 266

Multiple Choice

Suppose you have a winning lottery ticket and you have the option of accepting $3,000,000 three years from now or taking the present value of the $3,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is

• A) $2,518,858.
• B) $2,591,520.
• C) $2,670,000.
• D) $3,000,000.

---

Definitions:

Western Europe

A region encompassing the western part of Europe, often known for its distinct historical and cultural identity.

Proprietorships

A form of business ownership where a single individual owns, manages, and is responsible for all aspects of the business, including its debts and liabilities.

Partnerships

An official business setup involving two or more partners, sharing both the management responsibilities and the earnings.

Net Income

The total revenue of a business minus total expenses, taxes, and costs, representing the profit made during a specific period.