McScrooge tells you he can earn 5.8% annual interest, compounded quarterly, on his money. You have no reason to question his assumption. For each option, determine the present value of all relevant cash flows for 0.8 points each and then provide your final answer for 0.8 points (total of 4 points for this problem).te lottery prize quoted as "$12 million dollar lottery", what this really means is that if you take the monthly payments of $50,000 for 20 years, you will have a total payout of $12 million. If the appropriate interest (discount) rate is assumed to be 4.8% APR, what would be the cash payout on this lottery today?

Answer rating: 100% (QA)

To determine the present value of the lottery prize we can use the formula for present value of an a... View the full answer