Lucky Ed, 70, just won a Power Ball Lotto worth $120 million. He has two options

ID: 2778482 • Letter: L

Question

Lucky Ed, 70, just won a Power Ball Lotto worth $120 million. He has two options collect his winnings:

Option #1: Annuity Option: One Pmt per year. In all 20 pmts

Option # 2: Cash Option: Lotto Commission would use a Discount Rate of 10% to calculate this value.

Assume Ed to be 40% Marginal Tax bracket. On Your advice, Ed has decided to take the Cash Option.

Based on your calculation Joe would, under Cash Option, receive a Lump Sum of:

Note: The answers are rounded to Zero Decimal points.

$30m

$72m

$31m

$30m

$72m

$34m

$31m

$30m

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