Assume that you just won the state lottery. Your prize can be taken either in the form of 100,000 at the end of each of the next 15 years or as a single amount of $1,000,000 paid immediately. If you expect to be able to earn 5% annually on your investments, ignoring taxes and other considerations, which alternative should you take? Why?

Assume that you just won the state lottery. Your prize can be taken either in the form of 100,000 at the end of each of the next 15 years or as a single amount of $1,000,000 paid immediately. If you expect to be able to earn 5% annually on your investments, ignoring taxes and other considerations, which alternative should you take? Why?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 6E

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