Indifferent between the two alternatives

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Reference no: EM13976575

Consider the decision you might have to make if you won a state lottery worth $105 million. Which would you choose: a lump-sum payment of %54 million today or a payment of $3.5 million each year for the next 30 years? Which would you choose?

a. If your opportunity cost is 6 percent, which alternative should you select?

b. At what opportunity cost would you be indifferent between the two alternatives?

Reference no: EM13976575

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