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What option would you choose and why

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Question - XYZ Inc. operates a "gaming" operation across Canada and the United States.XYZ utilizes a RRR of 10% in evaluating its long-term capital investment decisions.

On January 1, 2022, ZYZ offered a $200,000.00 "Power-Ball Bingo" in Canada under the following terms and conditions.

The winner of the Bingo has to choose from two mutually exclusive Options:

Option 1: The winner will receive $200,000 at the end of Year 10.

Option 2: The winner will receive $120,000.00 on January 1, 2022.

Required - Assuming you are the winner and that you have a RRR of 6%, what Option would you choose and why?

At what RRR would you be indifferent to relative to Both Options? Why?

Reference no: EM133146262

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