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What amount should bob offer lottery winners currently

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Point 1: Bob's Lottery Inc. has decided to offer winners a choice of $195,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 7 percent after-tax rate of return.

Question 1: What amount should Bob offer lottery winners currently, in order for him to be indifferent between the two choices?

Reference no: EM132472767

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