Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $390,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 6% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1,PVA of $1, FVAD of $1 and PVAD of $1)
Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $390,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 6% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1,PVA of $1, FVAD of $1 and PVAD of $1)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter2: Using Financial Statements And Budgets
Section: Chapter Questions
Problem 7FPE: Funding a retirement goal. Austin Miller wishes to have 800,000 in a retirement fund 20 years from...
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Mary Alice just won the lottery and is trying to decide between the options of receiving the annual cash flow payment option of $390,000 per year for 25 years beginning today, or receiving one lump-sum amount today. Mary Alice can earn 6% investing this money. At what lump-sum payment amount would she be indifferent between the two alternatives?
Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1,PVA of $1, FVAD of $1 and PVAD of $1)
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