Answer:
The amount received today is $600,000
Explanation:
The amount received today with lump sum option is the amount won $1 million minus the tax on lottery winnings at 40%.
The amount receivable today based on the above statement is computed thus:
Lump received today $1,000,000
less tax at 40%*$1000,000 ($400,000)
Net amount $600,000
The amount received today is $600,00 after having deducted the necessary tax .
However, the other option may be more viable if the tax rate on lottery winnings is expected to be reduced.
