Choice of taking your prize in one of three ways

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Reference no: EM132070154

You have won the lottery and you have the choice of taking your prize in one of three ways. First, you can choose to receive a single payment of $1,500,000 immediately. Second, you can choose to be paid $225,000 a year for 20 years. If select the third alternative, you will be entitled to the amount of $2,500,000 after 10 years. If your discount rate is 12%,

Which alternative should you choose? Explain your reasoning.

Reference no: EM132070154

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