You won the lottery and have a couple of choices as to how to take the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You won the lottery and have a couple of choices as to how to take the money. Which choice yields a greater present value? Present Value of $1 Periods 45 6769 8 Present Value of Annuity of $1 Periods 5% 3.546 4.329 5.076 456000 7 8 5% 0.823 0.784 0.746 0.711 0.677 0.645 9 5.786 6.463 7.108 6% 0.792 0.747 0.705 0.665 0.627 0.592 6% 3.465 4.212 4.917 5.582 6.210 6.802 8% 0.735 0.681 0.630 0.583 0.540 0.500 8% 3.312 3.993 4.623 5.206 5.747 6.247 10% 0.683 0.621 0.564 C. $85,000 (lump sum) 7 years from now using a 6% discount rate O D. $80,000 (lump sum) 7 years from now using an 8% discount rate 0.513 0.467 0.424 10% 3.170 3.791 4.355 4.868 5.335 5.759 A. $7,000 a year at the end of each of the next 6 years using a 6% discount rate B. $53,500 (lump sum) now using a 6% discount rate You won the lottery and have a couple of choices as to how to take the money. Which choice yields a greater present value? Present Value of $1 Periods 45 6769 8 Present Value of Annuity of $1 Periods 5% 3.546 4.329 5.076 456000 7 8 5% 0.823 0.784 0.746 0.711 0.677 0.645 9 5.786 6.463 7.108 6% 0.792 0.747 0.705 0.665 0.627 0.592 6% 3.465 4.212 4.917 5.582 6.210 6.802 8% 0.735 0.681 0.630 0.583 0.540 0.500 8% 3.312 3.993 4.623 5.206 5.747 6.247 10% 0.683 0.621 0.564 C. $85,000 (lump sum) 7 years from now using a 6% discount rate O D. $80,000 (lump sum) 7 years from now using an 8% discount rate 0.513 0.467 0.424 10% 3.170 3.791 4.355 4.868 5.335 5.759 A. $7,000 a year at the end of each of the next 6 years using a 6% discount rate B. $53,500 (lump sum) now using a 6% discount rate
Expert Answer:
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
Students also viewed these accounting questions
-
You have just won the lottery and have a choice of receiving a lump sum of $1,000,000 or an annuity of $100,000 per year for 15 years. If the appropriate discount rate is 8%, which alternative would...
-
You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 30 years, which will increase 5 percent per year. If the appropriate discount rate is 8 percent,...
-
You won the lottery and paid you $100,000 per year for the next 10 years. Assuming that you placed your winnings in an investment account, how much would that amount grow if you earned 6% during that...
-
Because of excessive pollution on the Momiss River, the state of Momiss is going to build pollution control stations. Three sites (1, 2, and 3) are under consideration. Momiss is interested in...
-
Do you agree or disagree with the following statements? Explain. (a) Validity is more critical to measurement than reliability. (b) Content validity is the most difficult type of validity to...
-
The Fiscal Year 2022 priorities for the Tax Exempt & Government Entities (TE/GE) Division of the IRS are available on the IRS website (irs.gov/pub/ irs-pdf/p5313.pdf). One of the priorities for the...
-
What are the major trends in urbanization?
-
The quarterly sales data (number of copies sold) for a college textbook over the past three years follow: a. Construct a time series plot. What type of pattern exists in the data? b. Use an Excel or...
-
The information presented below is for MRW Inc., which began operations in 2024. At the end of fiscal year 2024 and fiscal year 2025, the company determined its ending inventory at cost and at LCNRV....
-
Spectrum Sound, Inc. manufactures compact disc players with unusual features in its St. Louis Division. The divisional sales manager has estimated the following demand-curve data. Quantity Sold per...
-
You need to write a paper about MIMO: 1. We use beam-forming and/or diversity techniques for? 2. We use multi-layer transmission (spatial multiplexing) for? 3. We use beam-forming and multi-layer...
-
How much better is the return on a 7% yearly interest rate investment that is compounded monthly as opposed to compounded yearly? Hint: 5.1 is 2% better than 5. (5 = 1.02)
-
If the total inpatient service days for the Oncology Unit for June 1 through June 3 0 are 2 , 9 4 7 , what is the average daily census for the period?
-
Find the 24th percentile, P24, from the following data P24 11 16.4 17.1 18.3 20.5 22 24.5 24.6 24.9 26.3 28 29.7 30.6 35.1 37.4 39.4 41.8 43.5 43.8 45.4 49.2 49.3 49.5 50
-
Write a favor/action request letter to a person in your community inviting him/her to speak to your class on a topic related to the curriculum. Anticipate and include all the necessary details the...
-
Describe the impact of strategy formulation to pursue market opportunities in an international business firm.
-
Galaxy Inc. reported net income for accounting purposes of $1,130,000. In calculating this amount, the following items were deducted: 1- Income tax expense 2- Interest expense (Includes $7,000 of...
-
Find the reduced echelon form of each of the matrices given in Problems 120. c 1 26 + 4
-
Many items are sold not in markets but in auctions where bidders do not know how much others value the object that is up for bid. We will analyze a straightforward setting like this here which...
-
The following is intended to explore what kinds of income-demand relationships are logically possible. A: For each of the following, indicate whether the relationship is possible or not and explain:...
-
Superstores like Costco and Sams Club serves as wholesalers to businesses but also target consumers who are willing to pay a fixed fee in order to get access to the lower wholesale prices offered in...
-
How does a firms corporate strategy affect its operations management?
-
How do production management and service operations management differ?
-
What is supply chain management? What is vertical integration?
Study smarter with the SolutionInn App