Question: pents ecording ogin Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000

and was given four choices for receiving her winnings. 1. Receive $400,000

pents ecording ogin Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000 right now. 2. Receive $432,000 in 1 year. 3. Receive $75,000 at the end of each year for eight years. 4. Receive $38,000 at the end of each year for 30 years. Assuming Kerry can earn interest of 8% compounded annually. (a) calculate each option and (b) determine which option Kerry should choose? Use Excel or a financial calculator for computation. Round your answer to nearest dollar. (a) 1. $ (a) 2.5 (a) 35 (a) 4 5 (b)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Understanding the relationship between business and society and the ways in which business and society are part of an interactive system.

D Question 49 s 1. What is the equity account that exists only until the common stock shares are distributed? O Retained Earnings O Common Stock Dividend Distributable O Common Stock O Common Stock...

Please show all math simplified - if possible, use Excel Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. Receive $1,000,000 right...

Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000 right now. 2. Receive $432,000 in 1 year. 3. Receive $75,000 at...

those are the options for option B Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings 1. Receive $400,000 right now. 2. Receive $432,000...

Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. Receive $200,000 right now. Receive $216,000 in 1 year. Receive $40,000 at the end...

Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000 right now. 2. Receive $432.000 in one year. 3. Receive $40,000...

Marked out of 6.00 Flag question Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $1,000,000 right now. 2. Receive...

Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $250,000 right now. 2. Receive $270,000 in 1 year. 3. Receive $45,000 at...

Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $200,000 right now. 2. Receive $216,000 in 1 year. 3. Receive $40,000 at...

Consider 3 x 1 vectors u and v given by Compute the following quantities: (a) (inner/dot product) u v = u v (b) (inner/dot product) v u = v.u (c) ||ul| (d) ||v|| - u= 2 251 and -] = >

Suppose the target distribution is Then write the Gibbs sampler to generate a sample from this distribution. (X, Y), -N(() (2 1

What are the two basic types of risk?

Exploit Media, LLC, has three members: WACS Partners, Elyse O'Reilly, and Encounter Newspaper, LLC. On January 1, 20Y2, the three members had equity of $275,000, $55,000, and $220,000, respectively....

Alaska enacted a statute known as Alaska Hire. It required employers in the state to hire qualified Alaskan residents in preference to nonresidents. Hicklin, a nonresident, sued Orbeck, the state...

Using the finished version of the file for Example 9.4, use a data table to perform a sensitivity analysis on the risk tolerance. Specifically, let the risk tolerance in cell B12 vary from $10,000 to...

Penicillin is produced by fermentation and recovered from the resulting aqueous broth by extraction with butyl acetate. The penicillin distribution coefficient K (mass fraction of penicillin in the...

The rod of the fixed hydraulic cylinder is moving to the left with a constant speed v A = 25 mm/s. Determine the corresponding velocity of slider B when s A = 425 mm. The length of the cord is 1050...

Tori and some other childeen experimented with balls to see which ones rolled. First using a piece of cardboard to use as a ramp, they angled it on a block to the floor to test the balls. Then Tori...

What do you think? Is there such a thing as ethical hacking?

The boundaryless organization has the potential to create a major shift in the way we work. Do you agree or disagree? Explain.

What do you think about using volunteers to do work that other people get paid to do?