A lottery jackpot of one million is paid out $25,000 a year for 40 years. At a 10 percent required return, what is the present value of this payoff? Assume that the first payment is paid immediately.

Q: A lottery is offering a payout of 2000 every 4 weeks for 10 years. What is the value of the prize…

A:

Q: An investment offers $12,000 per year for 20 years, with the first payment occurring one year from…

A: The time value of money concept holds the utmost relevance while determining the future value and…

Q: What present value amounts to $15,000 if it is invested for 20 years at 8% compounded annually?…

A: Present Value = Future value / (1+r)^n Where, r = rate of interest i.e. 8% n = no. of years i.e. 20…

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: A lottery is a kind of game that engages people into a game of luck and probability, that is, a game…

Q: Imagine that you are the lucky winner of a cash calendar lottery prize! The prize pays regular…

A: GIVEN, A= $500 R= 1.7% M = 12 N =2

Q: In one year, a project will be worth $10,000. What is that project worth today assuming a discount…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: An investment offers $6,300 per year, with the first payment occurring one year from now. The…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: A project requires an initial outlay at t = 0 of $25,000, its expected cash inflows are $5,000 per…

A: Discounted payback period is the period required to collect any project's initial outlay after…

Q: You win the Publishers Clearing House Sweepstakes. You can choose between getting a lump sum of…

A: GIVEN, CASH = $5381214 OR A= $700000 N =10 R=5%

Q: The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments…

A: Present value is the present worth of any sum of a money to be received in the future at a specified…

Q: Suppose a state lottery prize of $4 million is to be paid in 5 payments of $800,000 each at the end…

A: The time value concept tells that the money received by an individual today is of more value than…

Q: You just won the $78 million Ultimate Lotto jackpot. Your winnings will be paid as $2,600,000 per…

A: Given information: Winnings will be paid as $2,600,000 per year Number of years paid is 30, Interest…

Q: You will receive $4,000 three years from now. The discount rate is 10 percent.  a) What is the…

A: In the given question we need to compute the value of investment after two years and one year from…

Q: You have just won the lottery and will receive $550,000 in one year. You will receive payments for…

A: Receipt in year 1 = $ 550,000 Annual growth rate = 3% Discount rate = 10%

Q: An investment offers $7,100 per year for 20 years, with the first payment occurring one year from…

A: When a fixed amount is received over the years, it is termed as annuity. To find the present value…

Q: An investment project yields $1,000 per year in perpetuity starting from t=1. What is the discounted…

A: In capital budgeting, the term discounted payback period determines a capital project's liquidity…

Q: What single investment made today, earning 10 % annual interest, will be worth $10,000 at the end of…

A: A) The present value of a future value can be calculated using the formula below: Given; FV = 10000…

Q: You just won a $625,000 lottery prize!  You will receive $25,000 per year for the next 25 years,…

A: Using present value of annuity due formulae, PV of annuity due = PMT * [1-(1/(1+r)^n)/r] * (1+r)

Q: An investment offers $8800 per year for 14 years with the first payment occuring one year from now.…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: Project L requires an initial outlay at t = 0 of $48,000, its expected cash inflows are $8,000 per…

A: The Payback Period, one of the capital budgeting techniques.is defined as the number of years…

Q: Project L requires an initial outlay at t = 0 of $60,000, its expected cash inflows are $9,000 per…

A: Payback period: The payback period is a simple method of capital investment evaluation. It counts on…

Q: ay you $99,000 in 15 years. If the appropriate discount rate is 6.7 percent compounded quarterly,…

A: The given problem can be solved using PV and EFFECT function in excel. PV function computes present…

Q: Suppose a state lottery prize of $3 million is to be paid in 20 payments of $150,000 each at the end…

A: The annual cash flow is $150,000. The number of years is 20. The interest rate is 12%, compounded…

Q: You won $100 000 in a lottery and you want to set some of that sum aside for 10 years. After 10…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: An investment will generate 10,000 a year for 25 years. If you can earn 10 percent on your funds and…

A: Present value of annuity=Annuity1-1+Interest rate-Time periodRate

Q: Suppose a state lottery prize of $3 million is to be paid in 5 payments of $600,000 each at the end…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Project L requires an initial outlay at t = 0 of $56,000, its expected cash inflows are $10,000 per…

A: Initial outlay = $56,000 Annual cash inflow = $10,000 WACC = 14% Period = 10 years

Q: You have received $200,000 from the PowerBall Lottery and want to have half that amount available…

A: Total lottary amount = $200,000 Amount required at retirement (FV) = $200,000/2 = $100,000 Interest…

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: Given Information Annuity Amount = $50,000 Time Period =20 years Current Rate of Return = 3.75%

Q: Suppose a state lottery prize of $6 million is to be paid in 10 payments of $600,000 each at the end…

A: The expression to calculate present value of future annual payments is shown below: Here, i is…

Q: An investment project provides cash inflows of $850 per year for five ears. What is the project…

A: Annual cash inflow = $850 Initial cost = $5,6004

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: The value of the lottery prize today is calculated as present value of annuity

Q: Project P has a cost of $1,000 and cash flows of $300 per year for three years plus another $1,000…

A: Time required of an investment to cover the investor’s expectation  without considering time value…

Q: Winners of the PowerState Lottery can take $30 million now or payments of $2.5 million per year for…

A: Option C. 3%

Q: Project L requires an initial outlay at t = 0 of $53,000, its expected cash inflows are $10,000 per…

A: Given, Initial outlay of project L is $53,000. Expected cash inflows $10,000 per year.

Q: A lottery claims its grand prize is $15 million, payableover five years at $3,000,000 per year. If…

A: Contributing an amount at the beginning of every period for a specified time period forms an annuity…

Q: Suppose a state lottery prize of $8 million is to be paid in 5 payments of $1,600,000 each at the…

A: Present value of the prize = P * {1-[1/(1+r)^n]/r} P = 1,600,000 n = no. of compounding period i.e.…

Q: Suppose a state lottery prize of $3 million is to be paid in 5 payments of $600,000 each at the end…

A: We will apply the concept of time value of money here. As per the concept of time value of money the…

Q: An investment offers $6,800 per year for 20 years, with the first payment occurring one year from…

A: Present Value: The present value is the concept that states an amount of money today is worth more…

Q: An investment offers $5,300 per year, with the first payment occurring one year from now. The…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.