You Won the Lottery and Have a Number of Choices

question 199

Multiple Choice

You won the lottery and have a number of choices as to how to take the money. Which choice yields a greater present value?

• 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) $84,000 (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

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Definitions:

Charismatic Leadership

A leadership style based on the leader's personal charm and appeal, often inspiring devotion and enthusiasm among followers.

Relative Deprivation Theory

A sociological theory that posits individuals or groups feel deprived relative to other similar individuals or groups, leading to social discontent.

Strain Theory

A sociological theory that explains deviance and crime as a result of the disconnect between societal goals and the means available to achieve those goals.

Social Solidarity Theory

A concept that emphasizes the importance of shared beliefs, values, and norms in maintaining unity and cohesion within a society.