You just won $150,000,000 worth of Lottery. You learn that you have two options: Option A: Get $35 million in cash value today (excluding taxes) Option B: Winner is guaranteed 30 incremental payouts over 29 years; First payment made today. These payments will increase by 5% each year until the final payment. The first payment received today equals $2,500,000. Calculate the present value of option B, assuming the required rate of return is 6%.

Answer rating: 100% (QA)

To compare Option A and Option B we need to calculate the present value of Option B We can use the f... View the full answer