Quokka recently won the lottery and has the opportunity to receive $200,000 per year at the end of the year for the next 20 years. Assuming an annual interest rate of 5% is appropriate, the future value is 2.65330 × $200,000 = $530,660, the present value of an ordinary annuity is 12.46221 × $200,000 = $2,492,442, and the present value of an annuity due is 13.08532 × $200,000 = $2,617,064.
What is the fair value of the lottery payments according to GAAP?

a. $530,660

b. $2,492,442

c. $2,617,064

d. $4,000,000