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%

---

Definitions:

Systems Development

The process of creating and maintaining information systems, including hardware, software, and networks.

High-quality System

A system that meets or exceeds predetermined standards of excellence, ensuring reliability, efficiency, and overall user satisfaction.

Product Owner

A role in Agile software development responsible for defining project goals, prioritizing tasks, and ensuring the final product meets user needs.

Business Users

Individuals within an organization who utilize information technology and systems in the course of their job to enhance productivity or decision-making.