If you won $10,000,000 in a Lottery and you have the following options: ...
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Accounting
If you won $10,000,000 in a Lottery and you have the following options:
Option A: taking the entire ten million dollars in one lump sum today
Option B: receiving $500,000 at the end of the year for each of the next 20 years.
If the annual interest rate is 6%, what is the present value (today's amount) that you won if you choose to receive $500,000 at the end of the year for the next 20 years? (Ignore taxes.)
Which would be the best option?
Please include calculations to for EACH of the options.
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