If you won the lottery should you take a lump sum or an annuity? Why?
Choosing a lump-sum amount of the lottery winnings will be beneficial because the present of value lump sum taken today will be higher than the annuities received at the regular interval. The lump-sum amount taken can be invested immediately in other investment opportunities offering a higher yield.
If you won the lottery should you take a lump sum or an annuity? Why?
If you won the lottery and had the choice of a lump-sum payoff or an annuity payoff, what factors would you consider besides the implied interest rate (indifference interest rate) in selecting the payoff style? Provide a quantitative example to illustrate your choice.
Suppose you won the Tri-State Megabucks Lottery in the previous question. What factors should you take into account in deciding whether you should take the annuity option or the lump-sum option? Ross, Stephen. Essentials of Corporate Finance (p. 154). McGraw-Hill Higher Education. Kindle Edition.
You just have won the PA lottery. This provides a payout of $50,000 per year for 20 years beginning immediately. What kind of annuity does this represent? What factors should you consider as you make the decision to take either the annuity or a lump sum payable immediately? Give at least 5 reasons for each alternative.
You just have won the PA lottery. This provides a payout of $50,000 per year for 20 years beginning immediately. What kind of annuity does this represent? What factors should you consider as you make the decision to take either the annuity or a lump sum payable immediately? Give at least 5 reasons for each alternative.
If you won the lottery for $10 million and you had the choice to take a lump sum or payments over 20 years, a. which option would you choose? Why? b. What questions do you need answered before you decide? c. What situations may change your decision? Please cite your sources.
You have just won the $1,000,000 in the lottery. You have the option of taking a lump sum payout or equal annualized payments over 20 years. Ignoring any tax consequences; how much should you expect from the annualized payments. What target interest rate would make the annualized payments more valuable than the lump sum. In your response, you may want to consider such issues as inflation, investing lump sum in stock market (What have been the long-term historic returns?) to...
You have just won the $1,000,000 in the lottery. You have the option of taking a lump sum payout or equal annualized payments over 20 years. Ignoring any tax consequences; how much should you expect from the annualized payments. What target interest rate would make the annualized payments more valuable than the lump sum. In your response, you may want to consider such issues as inflation, investing lump sum in stock market (What have been the long-term historic returns?) to...
You just won the $20,000,000 lottery price. Either you can take the annual payments of $1,000,000 per year for 20 years or you can elect to receive a lump sum value of the annual payments using a discount rate of 6%. You have elected to receive the lump sum amount. What is the net lump sum amount you will received after applying Federal and State Income Taxes; 25% and 12% respectively. What is the Net Lump Sum distributed after taxes?...
Michael has just won the lottery! He has an option of taking a lump sum of $17 million or can be paid $900,000 per year for 30 years at the end of the year. The discount rate is 3%. Which option is better?
Congratulations! You have just won the State Lottery. The lottery prize was advertised as an annualized $105 million paid out in 30 equal annual payments beginning immediately. The annual payment is determined by dividing the advertised prize by the number of payments. Instead you could take a one lump cash prize of the present value of all the annuity payments using a 4.5% discount rate. You now have up to 60 days to determine whether to take the cash prize...