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You Have Won the Lottery

question 321

Essay

You have won the lottery. There are two payment options for you. The first option is a lump sum payment of $10 million that you will receive immediately. The second option is an annual payment of $1 million for each of the next 12 years. Assume there is no inflation. How would you make a decision between the two options?


Definitions:

Deposits In Transit

Funds that have been received and recorded by a business but not yet by its bank, typically relating to bank reconciliation processes.

Purchase Order

A formal document sent from a buyer to a seller to initiate the purchase of products or services with specified terms.

Vendor

An individual or company that sells goods or services to another entity, typically within a supply chain.

Petty Cash

A small amount of cash kept on hand for making immediate payments for miscellaneous small expenses in an office or business.

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