The state lottery's million-dollar payout provides for $1million to be paid over 19 years in 20 payments
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Question:
The state lottery's million-dollar payout provides for $1million to be paid over 19 years in 20 payments of $50,000. The first $50,000 payment is made immediately, and the 19 remaining $50,000 payments occur at the end of each of the next 19 years.
If 10 percent is the appropriate discount rate, what is the present value of this scream of cash flows? If 20 percent is the appropriate discount rate, what is the present value of the cash flows?
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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