Answer- Net present value of his winnings = $414092.
Explanation- The factor for 11% for 20 periods is =7.9633.
Net present value =$52000*7.9633
= $414092
Exercise 12A-6 Basic Present Value Concepts [LO12-7) The Caldwell Herald newspaper reported the following story: Fr...
The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1.3 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $65,000 each. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can...
The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery. Mr. Ormsby won the week's grand prize totaling $1.02 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51000 each. Click here to view Exhibit 128-1 and Exhibit 12B-2. to determine the appropriate discount factor(s) using tables. Required: 1. 1 Mr. Ormsby can...
The Caldwell Herald newspaper reported the following story, Frank Ormsby of Caldwell is the state's newest millionaire By choosing the six winning numbers on last week's state lottery. Mr. Ormsby won the week's grand prize totaling $124 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $62,000 each. Click here to view Exhibit 130-1 and Exhibit 13B-2. to determine the appropriate discount factor(s) using tables Required: 1. If Mr. Ormsby can...
Exercise 12A-6 Basic Present Value Concepts (L012-7) The Caldwell Herald newspaper reported the following story, Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1.14 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $57,000 each Click here to view Exhibit 123.1 and Exhibit 128-2. to determine the appropriate discount factor(s) using...
Exercise 12A-5 Basic Present Value Concepts [LO12-7] The Atlantic Medical Clinic can purchase a new computer system that will save $4,000 annually in billing costs. The computer system will last for twelve years and have no salvage value. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic...
Exercise 12A-5 Basic Present Value Concepts [LO12-7) The Atlantic Medical Clinic can purchase a new computer system that will save $9,000 annually in billing costs. The computer system will last for eleven years and have no salvage value Click here to view Exhibit 128_1 and Exhibit 128-2. to determine the appropriate discount factors) using tables Required: What is the maximum price le, the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic...