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Investment opportunity cost

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Reference no: EM131710464

You just won $20,000,000 in the power ball of the Texas lottery. They lottery commission has asked you to chose between the following two options for your payout. Get paid $4,000,000 today and 4,000,000 per year at the end of the next four years, or take $16,000,000 today.

1. If your investment opportunity cost is 12%, which alternative would you chose?

2. What about if your investment opportunity cost were 15%?

Reference no: EM131710464

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