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Looks Can Be Deceptive! Many Play, Few will When, and even few will truly win.
If you were one of the winners, which option would you select? Why?
The annuity seems to the more finically safe, because the option only has a one time taxation of federal and state, in this case is 32.2 %. However, the quicker and faster way is cash option which usually taxed twice, once from lottery commission which about 50% and then the state and federal. However, once one dies the winnings are consumed by the state not the family of the deceased, so I would say for someone expecting live for the next 26 years this is a great option, however if you do not chose the annuity option.
Is the state of Michigan justified in advertising the prize amount as 363 million? Explain
On initial thought no, mainly because of false advertising, and having individuals believing under false pretenses. However, after further examination I drew form upon the conclusion that they must have a published cash valued amount to calculate the result in true value later. It truly is the consumer/winners ignorance that is under false belief not the state of Michigan.
Why do most winners select the cash option plan when given a choice?
Less number of years, not just he least being 26 years. Which will in return increase the payments dramatically. This will entice the cash option to choose the annuity, because the payout is greater. Also, if there was a large sum available in the beginning for the winner, then the rest broken into large options. Reason being most individuals wish enjoy and spend immediately after winning, not later.
The End
Good Luck to all winners.