Consider a lottery that pays to the winner an annuity of $ 700 that begins immediately (an
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Question:
Consider a lottery that pays to the winner an annuity of $700 that begins immediately (an annuity due) and then annually in year 1 through year 21 with one exception. Because of high administrative costs associated with running the lottery, the payment in year 16, and only 16, is not $700 but $0. Using an interest rate of 4%,
determine the present value of this cash flow stream.
Related Book For
Financial Theory and Corporate Policy
ISBN: 978-0321127211
4th edition
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
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