You win a lottery payout of $10,000 a year for the next 30 years. If your investment rate is 8 percent, how much would an acceptable lump sum payment be?
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- How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate?
- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityConestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
- You have just won the lottery and will receive $520,000 in one year. You will receive payments for 26 years, and the payments will increase 4 percent per year. If the appropriate discount rate is 12 percent, what is the present value of your winnings?You can receive lottery winnings of either $800,000 now or $100,000 per year for the next 10 years. If your interest rate is 5% per year, which do you prefer?How much would you accept in a lump sum today, in place of a lottery payment of $35,000 at the end of the next 20 years ($700,000 in total), assuming you could invest it at a 6 percent rate?
- You have just won 50 million in the lottery, payable in equal yearly installments over the next 20 years (first payment to be made immediately). Instead of taking the annual payments, you also have the option of receiving a lump sum amount immediately. If the interest rate is 6% per year, what is the minimum lump sum amount you would except in place for the payments? What if the interest rate is 10% per year? Please show the formula and answer.You are scheduled to receive $5,000 in two years. When you receive it, you will invest it at 6.5 percent per year. How much will your investment be worth eight years from now? Can the excel and calculator solutions be provided?