Congratulations! You have just won the lottery. The lottery board offers you three different options for collecting
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Congratulations! You have just won the lottery. The lottery board offers you three different options for collecting your winnings:
1. You will receive payments of $500,000 at the end of each year for twenty years.
2. You will receive a lump-sum payment of $4,500,000 today.
3. You will receive a lump-sum payment of $1 million today and payments of $2,100,000 at the end of Years 5, 6, and 7.
Assume that all earnings can be invested at a 10 percent annual rate. Which option should you choose and why?
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Option 1 Present value 500000 x Present value factor for an ordinary annuity ...View the full answer
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my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
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