Question: (Evaluating Payment Alternatives) Howie Long has just learned he has won a $500,000 prize in the lottery. The lottery has given him two options for

(Evaluating Payment Alternatives) Howie Long has just learned he has won a $500,000 prize in the lottery. The lottery has given him two options for receiving payments: (1) If Howie takes all the money today, the state and the federal governments will deduct taxes at a rate of 46% immediately. (2) Alternatively, the lottery offers Howie a payout of 20 equal payments of $36,000 with the first payment occurring when Howie turns in the winning ticket. Howie will be taxed on each of these payments at a rate of 25%

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