Mr N. M. is lucky to have a lottery prize of Rs 20 million. He does not have any liability and does not have any claimant over this money. He has the following alternatives:
(i) Give this money to his friend who agrees to pay Rs 20 million at the end of 1st year and Rs 5 million at the end of 2nd year;
(ii) Give this money to his brother who agrees to pay Rs 10 million per annum for three years.
(iii) Invest the money in a business with an expectation to get Rs 5 million every year for 15 years.
(iv) Exchange this money with the money which his friend Shyam is to inherit in 20 years. Shyam expects to inherit Rs 50 million.
1. In your views, which alternative is more profitable?
2. What additional information is required in order to take a decision?