2. Kelsey just won the lottery, and she must choose among three award options .She can...
2. Kelsey just won the lottery, and she must choose among three award options .She can elect to receive a lump sum today of $62 million, to receive end-of-month payments of $0.8 million for 10 years or to receive end-of month payments of $0.47 million for 30 years. If she can earn 8% annually (i.e., the discount rate is 8% per year), which is the best choice based on the PV of the three award options?
a) PV of 1st award option:
b) PV of 2nd award option:
N= I/YR= PMT= FV= PV=
c) PV of 3rd award option
N= I/YR= PMT= FV= PV=
d) Which is the best choice for Kelsey?
Homework Answers
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