What is the present value of your


Assume that you just won $260 million in the Mega-Millions lottery, and hence the state will pay you 20 annual payments of $103million each beginning immediately. If the rate of return on securities of similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is 4.5 percent, what is the present value of your winnings?

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Financial Management: What is the present value of your
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