Make choices based purely on the time value of money

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Question 1: If won the lottery and the lottery bureau informed me that I can take your winnings in one of two ways. Choice X pays $1,000,000. Choice Y pays $1,750,000 at the end of five years from now. Using a discount rate of 5 percent, based on present values, which would you choose? Using the same discount rate of 5 percent, based on future values, which would you choose? (Make your choices based purely on the time value of money.)

Reference no: EM132500051

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