Mary Alice Just Won the Lottery and Is Trying to Decide

Multiple Choice

Mary Alice just won the lottery and is trying to decide between the annual cash flow payment option of $250,000 per year for 25 years beginning today and the lump sum option. Mary Alice can earn 6 percent investing his money. At what lump-sum payment amount would she be indifferent between the two alternatives?

A) $6,250,000.
B) $3,195,840.
C) $3,637,590.
D) $3,387,590.$250,000 x 13.55036* = $3,387,590 *PVAD of $1: n=25; i=6%