Ahmed Al Khatib has just won the lottery and must choose among three award options: lump sum of $61 million today 10 end-of-year payments of $9.5 million 30 end-of-year payments of $5.5 million If Ahmed can earn 7% annually, which option should he choose?   If Ahmed can earn 8% annually, which option should he choose?   If Ahmed can earn 9% annually, which option should he choose?   Explain how interest rates influence Ahmed’s choice.

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A:

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Q: Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total…

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Q: Fizal plan to invest RM2,000 in one of the Malaysian unit trusts each year for the next 18 years. He…

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A: Answer a: Computation of NPV of each option: Since the NPV of Option 3 is more, it is recommended.

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