You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments
Question:
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $375,000 per year. Thus, in one year, you receive $1.375 million. In two years, you get $1.75 million, and so on. If the appropriate interest rate is 6.5 percent, what is the value of your winnings today?
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Step by Step Answer:
To solve this problem we need to find the PV of each lump sum and add them together It is ...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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