Chuck has just won the Flyball Lottery. He has two options for receiving his prize. The first
Question:
Chuck has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $200,000 cash payment today. The second option is to receive $20,000 at the end of each of the next 19 years and a $50,000 lump sum payment in the twentieth year. Chuck can invest money at a 5% rate.
Required
a. Which option should Chuck choose to receive his winnings? Why?
b. If Chuck could invest money at 9%, which option should he choose? Why?
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a Option 1 present value 200000 Option 2 present value 260551 Cash ...View the full answer
Answered By
Somshukla Chakraborty
I have a teaching experience of more than 4 years by now in diverse subjects like History,Geography,Political Science,Sociology,Business Enterprise,Economics,Environmental Management etc.I teach students from classes 9-12 and undergraduate students.I boards I handle are IB,IGCSE, state boards,ICSE, CBSE.I am passionate about teaching.Full satisfaction of the students is my main goal.
I have completed my graduation and master's in history from Jadavpur University Kolkata,India in 2012 and I have completed my B.Ed from the same University in 2013. I have taught in a reputed school of Kolkata (subjects-History,Geography,Civics,Political Science) from 2014-2016.I worked as a guest lecturer of history in a college of Kolkata for 2 years teaching students of 1st ,2nd and 3rd year. I taught Ancient and Modern Indian history there.I have taught in another school in Mohali,Punjab teaching students from classes 9-12.Presently I am working as an online tutor with concept tutors,Bangalore,India(Carve Niche Pvt.Ltd.) for the last 1year and also have been appointed as an online history tutor by Course Hero(California,U.S) and Vidyalai.com(Chennai,India).
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