2. Kelsey just won the lottery, and she must choose among three award options .She can elect...
Question:
2. Kelsey just won the lottery, and she must choose among three award options .She can elect to receive a lump sum today of $62 million, to receive end-of-month payments of $0.8 million for 10 years or to receive end-of month payments of $0.47 million for 30 years. If she can earn 8% annually (i.e., the discount rate is 8% per year), which is the best choice based on the PV of the three award options?
a) PV of 1st award option:
b) PV of 2nd award option:
N= I/YR= PMT= FV= PV=
c) PV of 3rd award option
N= I/YR= PMT= FV= PV=
d) Which is the best choice for Kelsey?
Fundamentals of Financial Management
ISBN: 978-1305635937
Concise 9th Edition
Authors: Eugene F. Brigham