ou have just received notification that you have won the $2.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 62 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? Multiple Choice $12,395.81 $3,794.39 $3,949.26 $3,562.08

ou have just received notification that you have won the $2.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 62 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? Multiple Choice $12,395.81 $3,794.39 $3,949.26 $3,562.08

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.20MCE

See similar textbooks

Similar questions

you have just received notification that you have won the 1 million first prize in the centennial lottery. however the prize will be awarded on your 100th birthday, 80 years from now. what is the present value of your windfall of the appropriate discount 8.45 percent
You have just received notification that you have won the $1.25 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday, 79 years from now. The appropriate discount rate is 6.4 percent. What is the present value of your winnings?
You have just received notification that you have won the $2.19 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 61 years from now. What is the present value of your windfall if the appropriate discount rate is 12 percent? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
You have just received notification that you have won the $1 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday, 80 years from now. What is the present value of your windfall if the appropriate discount rate is 8.45 percent?
You have just received notification that you have won the $3 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 66 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You have just received notification that you have won the $1.5 million first prize in the Centennial Lottery. However, the prize will be awarded on you 100th birthday assuming you're around the collect, 63 a years from now. What is the present value of your windfall if the appropriate discount rate is 8 percent?
You have just received notification that you have won the $1 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 80 years from now. What is the present value of your windfall if the appropriate disc ount rate is 7.25 percent? The computation is wrong as 1.07 rasied to 80 is not 62....
You have just won the lottery and will receive $580,000 in one year. You will receive payments for 28 years, which will increase 3 percent per year. The appropriate discount rate is 11 percent. Required: What is the present value of your winnings? $51,626,112 $6,102,947 $6,357,236 $31,217 $51,626,112 Only typed answer and give fast
You are the lucky winner of the Ohio Lottery ! Congratulations. The Lottery tells you that you have won a $20,000,000 prize that will be paid in annual installments of $1,000,000 for 20 years. If interest rates on alternative investments in the market are 8%, what is the actual value (PV) of your prize? Round to the nearest 1,000, and show your work.
Assume that you have just won the lottery. Lotto officials offered you the choice of two alternative payouts: ₱10,000,000 today; or ₱30,000,000 seven years from now. As a wise and financial literate individual, which payment will you choose if relevant interest rate is 10%? Explain your choice in not more than ten (10) sentences and support it with your computation.
Your friend just won the lottery. He has a choice of receiving $100, 000 at the end of each year for the next 30 years or a lump sum today. The lottery uses an 6% annual discount rate. What lump sum would your friend receive if he chose this option?
The top prize for the state lottery is $105,704,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $105,704,000 in 25 equal payments of $4,228,160—one payment today and one payment at the end of each of the next 24 years. If you choose the cash payment, you will receive a one-time lump sum payment of $57,293,079.68. At what interest rate would you be indifferent between the cash and annual payment options? (Round answer to 0 decimal places, e.g. 15%.) Interest rate %