Arecent mega millions estimated jackpot amount is $300 million which is the undiscounted sum of the 26 annuity option payments with a cash option of $207 million. the first payment under the annuity option which would occur immediately is $4,515,432 with 29 additional annual payments with each payment being 5% larger than the previous one. using this information and assuming you demand a 4% annual return, would you prefer the annuity option or the cash option if you have the winning ticket?

Itis better to take the case in hand of 207,000,000 millions

Explanation:

We need to calcualte the present value of a geometric annuity-due

g0.05

r0.04

C4,515,432

n26

n26

 127,557,727.45

As is an annuity due, we multiply by (1+r)

127,557,727.45 x (1+0.04) = 132,660,036,548

The present value of the 207,000,000 option is better as the annuity present value is around 130,000,000

d, conspicuous consumption is when you try to increase your wealth or social status (and in the case he's trying to create the perception of wealth considering he can't really afford it)

government control and resources