Evaluating lump and sums and annuities crissie just won the, Ask an Expert

Finance

EVALUATING LUMP AND SUMS AND ANNUITIES Crissie just won the lottery, and she must choose among three award options. She can elect to receive a lump sum today of $61 million, to receive 10 end-of-year payments of $9.5 million, or to receive 30 end-of-year payments of $5.5 million. (Hint compute the Present Valies of all options and compare)

A. If she thinks she can earn 7% annually,which should she choose?

B. If she expects to earn 8% annually, which is the best choice ?

C. Explain how interest rate influence her choice

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92846631

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