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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Definitions:

Wu Family Shrine

A notable archaeological site in China, known for its rich collection of stone carvings from the Eastern Han Dynasty, showcasing familial piety and Confucian values.

Larger Size

A term referring to objects, beings, or structures that are of greater dimensions than what is considered average or standard.

Deceased Ancestor

A family member who has passed away, often honored or remembered through rituals, monuments, or genealogical records.

Ceramic Figural Tradition

The historical practice of creating ceramic pieces that represent human or animal figures, found in various cultures.