Assume that you have won the Publishers Clearing House Sweepsteaks. When you are contacted about your winnings, you are offered the following three payout options:
a. Receive $10,000,000 in cash today.
b. Receive $2,200,000 today and $1,050,000 per year for 15 years, with the first $1,050,000 payment being received one year from today.
c. Receive $1,200,000 per year for 15 years, with the first payment being received one year from today.
Assuming the effective rate of interst is 12% and using the present value concepts presented, which option should you select? Explain your answer and give supportion calculations.