You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or receive$20,700 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments.Required:1. Calculate the present value of both the options (EV. of $1. PV or $1. EVA of $1, and PVA of $1) (Use the appropriate factor(s) from thetables provided. Round your answers to nearest whole dollar.)Present Value105,000Option 1Option 22. Which alternative should you select?O Option 1O Option 2

Option-1: Receive $ 105,000 today The present value of option 1 will be equal to the amount to be…

You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or receive $20,700 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments. 1. Calculate the present value of both the options (EV.of $1. PV.of $1, EVA of $1, and PVA of $) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Required: Present Value Option 1 Option 2 105,000 2. Which alternative should you select?

You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or receive $20,700 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments. 1. Calculate the present value of both the options (EV.of $1. PV.of $1, EVA of $1, and PVA of $) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Required: Present Value Option 1 Option 2 105,000 2. Which alternative should you select?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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