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Congratulations. You have won $10,000 in a competition. You can choose either to receive the full...

Congratulations. You have won $10,000 in a competition. You can choose either to receive the full amount today (suppose today is January 1st) or to receive five equal payments in the coming five years (payment will be made at the end of a year). However, if you choose the first option, the income tax is 35%. For the second option, the annual income tax for five equal payments is 20%. If your opportunity cost (required return rate) is 8% annually, which option is better for you?

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