Congratulations, you have won $1,000,000 in Mass Lottery. Our displeasure is to announce that after taxes...

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Finance

Congratulations, you have won $1,000,000 in Mass Lottery. Ourdispleasure is to announce that after taxes your winning is$500,000 (use 10% annual rate) a. How would you like that? b. Onelump sum today? c. In 10 annual installments of $50,000? d. In 20semi-annual installments of $12,500? e. Or, $500,000 in 10 years?Please provide your calculation (on Excel) for each of the optionsusing PV calculations: So, what option do you choose now and why?_________________

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4.3 Ratings (672 Votes)
I will choose the option One lump sum todayBy deferring the payment I am losing on the    See Answer
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Congratulations, you have won $1,000,000 in Mass Lottery. Ourdispleasure is to announce that after taxes your winning is$500,000 (use 10% annual rate) a. How would you like that? b. Onelump sum today? c. In 10 annual installments of $50,000? d. In 20semi-annual installments of $12,500? e. Or, $500,000 in 10 years?Please provide your calculation (on Excel) for each of the optionsusing PV calculations: So, what option do you choose now and why?_________________

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