Homework Answers
The lump-sum amount should at least be greater than the Present Value of all future cashflows.
| Year | Amount | Present Value |
| 10 | 35,000 | 17,792 |
| 9 | 35,000 | 19,038 |
| 8 | 35,000 | 20,370 |
| 7 | 35,000 | 21,796 |
| 6 | 35,000 | 23,322 |
| 5 | 35,000 | 24,955 |
| 4 | 35,000 | 26,701 |
| 3 | 35,000 | 28,570 |
| 2 | 35,000 | 30,570 |
| 1 | 35,000 | 32,710 |
| 2,45,825 |
Answer - $245,825
Give a thumbs up if this helped :)
Add Answer to:
1 pts You won a lottery. You have two options receiving $35,000 at the end of...
1. Lory won a lottery. She will have a choice of receiving $25,000 at the end...
1. Lory won a lottery. She will have a choice of receiving $25,000 at the end of each year for the next 30 years, or a lump sum today. If she can earn a return of 10 percent on an investment she makes, what is the minimum amount she should be willing to accept today as a lump-sum payment? (Round to the nearest hundred dollars.) A) $750,000 B) $196,780 C) $212,400 D) $235,700 2. The U.S. Treasury has issued 10-year...
Mary Alice just won the lottery and is trying to decide between the options of receiving...
Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $300,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 5% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s)...
Mary Alice just won the lottery and is trying to decide between the options of receiving...
Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $260,000 per year for 30 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 5% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...
You have won the lottery at the beginning o f this year. You have the option of...
You have won the lottery at the beginning o f this year. You have the option of receiving a lump sum payment (now) of $5,000 or receiving the cash over three years respectively: Year 1 $2,000; Year 2 $2,500; Year $3,000. You currently receive a risk-free rate of return of 3% in your high yield savings bank account. When considering the time value of money, what option is more valuable. Hint: Create a cash flow schedule for the yearly payments and compare against...
Your friend just won the lottery. He has a choice of receiving $122,788 a year for...
Your friend just won the lottery. He has a choice of receiving $122,788 a year for the next 18 years or a lump sum today. The lottery uses a 8% discount rate. What would be the lump sum your friend would receive?
You have just won the Multi-State Lottery. You have the option of receiving a check for...
You have just won the Multi-State Lottery. You have the option of receiving a check for $40,000,000 every year at the end of the next 23 years. The lottery commission also allows you the option of receiving a one-time payment of $414,842,358 when you turn in the winning ticket. What is the approximate interest rate that the lottery commission is using to determine the one-time payment? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round...
Congratulations, you have just won $10,000,000 in the Power Ball Lottery. However, as is often the...
Congratulations, you have just won $10,000,000 in the Power Ball Lottery. However, as is often the custom with lotteries, you have the following choices: Alternative A: taking the entire ten million dollars in one lump sum today Alternative B: receiving $500,000 at the end of the year for each of the next 20 years. Please send your computed answers base on both alternatives to me along with your reasoning why you choose either alternative A or alternative B. If the...
You have just won “$10,000,000” in a lottery. However, when you go to collect your check...
You have just won “$10,000,000” in a lottery. However, when you go to collect your check you find that the “$10,000,000” is actually payments of $1,000,000 per year for the next 10 years. How much should you be willing to accept now, in a lump sum, if your opportunity cost discount rate is 10%? Round your answer to the nearest dollar.
Lottery. Your dreams of becoming rich have just come true. You have won the State of...
Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $4,000,000 advertised jackpot. You can take annual payments of $80,000 at the end of the year for the next 50 years or $978,679 today. a. If your investment rate over the next 50 years is 10%, which payoff will you choose? b. If your investment rate over the next 50 years is 7%,...
Your friend just won the lottery. He has a choice of receiving $50,000 a year for...
Your friend just won the lottery. He has a choice of receiving $50,000 a year for the next 20 years or a lump sum today. The lottery uses a 15% discount rate. What would be the lump sum your friend would receive? I know the answer is 312,966.57, however, I don't know why my calculator cannot get this number.
1. Lory won a lottery. She will have a choice of receiving $25,000 at the end of each year for the next 30 years, or a lump sum today. If she can earn a return of 10 percent on an investment she makes, what is the minimum amount she should be willing to accept today as a lump-sum payment? (Round to the nearest hundred dollars.) A) $750,000 B) $196,780 C) $212,400 D) $235,700 2. The U.S. Treasury has issued 10-year...
Your friend just won the lottery. He has a choice of receiving $122,788 a year for the next 18 years or a lump sum today. The lottery uses a 8% discount rate. What would be the lump sum your friend would receive?
You have just won the Multi-State Lottery. You have the option of receiving a check for $40,000,000 every year at the end of the next 23 years. The lottery commission also allows you the option of receiving a one-time payment of $414,842,358 when you turn in the winning ticket. What is the approximate interest rate that the lottery commission is using to determine the one-time payment? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round...
Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $4,000,000 advertised jackpot. You can take annual payments of $80,000 at the end of the year for the next 50 years or $978,679 today. a. If your investment rate over the next 50 years is 10%, which payoff will you choose? b. If your investment rate over the next 50 years is 7%,...
Most questions answered within 3 hours.
-
Using C++ :
A Pascals triangle row is constructed by looking at the previous
row and...
asked 3 minutes ago -
With what speed will the fastest photoelectrons be emitted from
a surface whose threshold wavelength is...
asked 3 minutes ago -
The following slope distances and differences in elevations
between the tape ends were recorded for a...
asked 4 minutes ago -
1. Assuming random walk markets and normally distributed
returns, if a one day VaR on an...
asked 14 minutes ago -
(a) With a variable life insurance policy, the rate of return on
the investment (the death...
asked 24 minutes ago -
By applying what you know about Grignard reagents and the
mechanism by which benzoic acid is...
asked 47 minutes ago -
For thermoplastics, explain the effects of increasing of each of
the following properties on a polymer’s...
asked 48 minutes ago -
Make a menu for the user to use in python 3 that can search and
replace...
asked 39 minutes ago -
1) An aqueous solution contains 0.280 M
NaHS and 0.128 M
H2S.
The pH of this...
asked 54 minutes ago -
Situational Leadership
is based on interplay of all of the following except:
The amount of guidance...
asked 55 minutes ago -
Consider the following problem: given n positive integers,
separate them into two groups such that adding...
asked 59 minutes ago -
Briefly discuss the following statements:
2.1 A partner never has the right to claim compensation for...
asked 1 hour ago