Time value of money and the lottery. A friend of yours by the name of Pam has asked you for financial advice. She recently won a state lottery and was asked by the lottery officials to choose between the following payout options:
Option 1 - Receive a lump sum payment today of $61 million OR
Option 2 - Receive 30 end-of-year payments of $5.5 million each.
Would your answer to question 1 change if Sam expects a 9% return on his investments instead of 7%? Why or why not?