# Question: The state lottery s million dollar payout provides for 1

The state lottery’s million- dollar payout provides for $ 1 million 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 stream of cash flows? If 20 percent is the appropriate discount rate, what is the present value of the cash flows?

**View Solution:**## Answer to relevant Questions

Upon graduating from college 35 years ago, Dr. Nick Riviera was already thinking of retirement. Since then he has made deposits into his retirement fund on a quarterly basis in the amount of $ 300. Nick has just completed ...Albert Pujols hit 47 home runs in 2009. If his home- run output grew at a rate of 12 percent per year, what would it have been over the following 5 years? If we were to graph the returns of a stock against the returns of the S& P 500 Index, and the points did not follow a very ordered pattern, what could we say about that stock? If the stock’s returns tracked the S& P 500 ...Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk- free rate is 5 percent and the expected return for the market is 12 percent. You own a portfolio consisting of the stocks below: The risk- free rate is 3 percent. Also, the expected return on the market portfolio is 11 percent. a. Calculate the expected return of your portfolio. b. Calculate the ...Post your question