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State has offered you three payment options

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You have won the Lottery! The state has offered you three payment options - a) $1 million today tax free; b) $1.5 million a the end of year 2 taxed at 20%; c) $1 million at the end of year 2, and $1 million at the end of year 4 with both payments taxed at 20%. The discount rate is 6%. Which option do you choose?

Reference no: EM131235558

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