Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
13th Edition
ISBN: 9781305781429
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 12.19EX
To determine
Present Value: The value of today’s amount expected to be paid or received in the future at a compound interest rate is called as present value.
To calculate: The present value of winnings
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Present value of an annuity
On January 1, you win $43,500,000 in the state lottery. The $43,500,000 prize will be paid in equal installments of $7,250,000 over six years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Open spreadsheet
Present value of an annuity
DATA
Sum of prize
$43,500,000
Annual payment
$7,250,000
Number of years
6
Interest rate
5.0%
Date of win
January 1
Date of payments
December 31 of each year
Using formulas and cell references, perform the required analysis, and input your answer into the Amount column. Transfer the numeric result for the green entry cell (B14) into the appropriate field in CNOWv2 for grading.
Amount
Formula
PV of annual payments
Present value of an annuity
On January 1, you win $43,500,000 in the state lottery. The $43,500,000 prize will be paid in equal installments of $7,250,000 over six years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Open spreadsheet
Determine the present value of your winnings. Round your answer to the nearest dollar.
$ fill in the blank 2
Present value of an annuity
On January 1, you win $43,500,000 in the state lottery. The $43,500,000 prize will be paid in equal installments of $7,250,000 over six years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
Open spreadsheet
Determine the present value of your winnings. Round your answer to the nearest dollar.
Chapter 12 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
Ch. 12 - Describe the two distinct obligations incurred by...Ch. 12 - Explain the meaning of each of the following terms...Ch. 12 - Prob. 3DQCh. 12 - A corporation issues 26,000,000 of 9% bonds to...Ch. 12 - Prob. 5DQCh. 12 - The following data relate to a 2,000,000, 8% bond...Ch. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Fleeson Company needs additional funds to purchase...Ch. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1APECh. 12 - Prob. 12.1BPECh. 12 - Issuing bonds at face amount On January 1, the...Ch. 12 - Prob. 12.2BPECh. 12 - Issuing bonds at a discount On the first day of...Ch. 12 - Prob. 12.3BPECh. 12 - Prob. 12.4APECh. 12 - Prob. 12.4BPECh. 12 - Prob. 12.5APECh. 12 - Prob. 12.5BPECh. 12 - Prob. 12.6APECh. 12 - Prob. 12.6BPECh. 12 - Redemption of bonds payable A 1,500,000 bond Issue...Ch. 12 - Prob. 12.7BPECh. 12 - Prob. 12.8APECh. 12 - Prob. 12.8BPECh. 12 - Prob. 12.9APECh. 12 - Prob. 12.9BPECh. 12 - Prob. 12.1EXCh. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Prob. 12.5EXCh. 12 - Prob. 12.6EXCh. 12 - Prob. 12.7EXCh. 12 - Entries for issuing and calling bonds; loss Adele...Ch. 12 - Entries for issuing and calling bonds; gain Emil...Ch. 12 - Entries for installment note transactions On the...Ch. 12 - Prob. 12.11EXCh. 12 - Entries for installment note transactions On...Ch. 12 - Prob. 12.13EXCh. 12 - Prob. 12.14EXCh. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Present value of amounts due Tommy John is going...Ch. 12 - Present value of an annuity Determine the present...Ch. 12 - Prob. 12.19EXCh. 12 - Prob. 12.20EXCh. 12 - Prob. 12.21EXCh. 12 - Prob. 12.22EXCh. 12 - Amortize discount by interest method On the first...Ch. 12 - Prob. 12.24EXCh. 12 - Prob. 12.25EXCh. 12 - Prob. 12.26EXCh. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Bond premium, entries for bonds payable...Ch. 12 - Prob. 12.4APRCh. 12 - Prob. 12.5APRCh. 12 - Prob. 12.6APRCh. 12 - Prob. 12.1BPRCh. 12 - Prob. 12.2BPRCh. 12 - Prob. 12.3BPRCh. 12 - Prob. 12.4BPRCh. 12 - Prob. 12.5BPRCh. 12 - Prob. 12.6BPRCh. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Prob. 12.3CPCh. 12 - Preferred stock vs. bonds Xentec Inc. has decided...Ch. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CP
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