Time value concepts can be applied to lottery winnings. The winner can usually choose an annuity or a lump sum.

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The time value of money concept applies to lottery winnings because winners often have the choice between receiving their winnings as an annuity, which is spread out over a period of time, or as a lump sum, which is a one-time payment. The decision between these options involves considering the present value of the annuity payments compared to the lump sum.

Time Value Concepts Can Be Applied to Lottery Winnings