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Potvin Potvin
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7 years ago
Penny just won the state lottery that offers a choice of payments. She may opt for either receiving $1,000,000 today or $2,000,000 at the end of ten years. If she can invest her funds at 5% annually, which is the better choice?
A) The later payment since $1,000,000 invested at 5% for ten years will be worth $1,500,000.
B) The immediate payment since the present value of the $2,000,000 payment is $1,200,000.
C) The earlier payment since the future value of $1,000,000 in ten years is $1,628,894.
D) The earlier payment since the present value of the $2,000,000 payment is $876,000.
E) The later payment since the present value of the $2,000,000 payment is $1,227,827.
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Corporate Finance Online

Corporate Finance Online


Edition: 1st
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BlimpBlimp
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7 years ago
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Pol. Sci. Major
Minoring in Business
Columbia University Sophomore

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Potvin Author
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#2
7 years ago
Smiling Face with Open Mouth wow
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