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Author Question: It ALWAYS makes more sense financially to take the lump sum payout from winning a lottery than ... (Read 40 times)

nevelica

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on: Jul 10, 2018
It ALWAYS makes more sense financially to take the lump sum payout from winning a lottery than taking the annual cash flows.
 
  Indicate whether the statement is true or false.

Question 2

If we discount the annual payments from winning the lottery at 10, the corresponding present value is greater than if we discount the annual payments at 12.
 
  Indicate whether the statement is true or false.


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orangecrush

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Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: It depends upon the interest rate used to discount the future cash flows.

Answer to Question 2

Answer: TRUE


nevelica

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Reply 2 on: Jul 10, 2018
Thanks for the timely response, appreciate it

softEldritch

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Reply 3 on: Yesterday
Wow, this really help

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