Hi, need to submit a 1000 words essay on the topic Financial Management Question 1.Taxes by the federal and state have to be paid as required by the law. therefore the lottery has to name the price as

Hi, need to submit a 1000 words essay on the topic Financial Management Question 1.

Taxes by the federal and state have to be paid as required by the law. therefore the lottery has to name the price as 363 million because that's the amount to be won before taxation. The lottery also brings many benefits to the community and the state as a whole such as funding education and therefore people need not to be negative about the price to be won.

If the only option available was the annuity payment then Larry could maximize the value of his winning by acquiring a loan from a bank that will be paid within the time limit, Larry would get money that will enable her to invest and an amount that will be payable at an amount of 4,732,962 dollars per year. The interest rate should be the guiding factor in determining the amount to acquire as loan.

Winners select the cash option because they are rational and want to maximize the value of their money today, they will opt to have their cash today than for 26 years due to uncertainties about the future, and they also do not want to pay taxes each year for 26 years because this will just reduce the total amount they receive.