You Have a Choice Between a Lottery Lump Sum Payout

question 110

Multiple Choice

You have a choice between a lottery lump sum payout of $5,975,191.24 today or a series of twenty annual annuity payments of $500,000 each (first cash flow one year from today) .At what discount rate are you indifferent between the two choices?

• A)4.50%
• B)5.50%
• C)6.50%
• D)7.50%

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