Jack just discovered that he holds the winning ticket for the $87 million "mega" lottery. Now he must decide which alternative to choose: (a) a $44 million lump-sum payment today or (b) a payment of $2.9 million per yer for 30 years. With Option (b) the first payment will be made today. If Jack's opportunity cost is 5 percent, what is the present value of Option (b)? (Use the following format for your answer - xx,xxx,xxx)

Jack just discovered that he holds the winning ticket for the $87 million "mega" lottery. Now he must decide which alternative to choose: (a) a $44 million lump-sum payment today or (b) a payment of $2.9 million per yer for 30 years. With Option (b) the first payment will be made today. If Jack's opportunity cost is 5 percent, what is the present value of Option (b)? (Use the following format for your answer - xx,xxx,xxx)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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