Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. congratulations! you have won a state lottery. the

Congratulations! You have won a state lottery. The state lottery offers you the following (after-tax)...

60.1K

Verified Solution

Question

Accounting

Congratulations! You have won a state lottery. The state lottery offers you the following (after-tax) payout options:

Option #1: $15,000,000 after five years.

Option #2: $2,150,000 per year for five years.

Option #3: $13,000,000 after three years.

Assuming you earn 8% on your funds, which option would you prefer?

Requirements:

Find PV of each option, and determine which is the best option.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

Calculate the mean for the discrete probability distribution shown here 6 25 O 25 X...

Basic Math
1.2K views

Determine which point in the figure P Q R or S has the given polar...

Biology
1.2K views

You are given a drink that you are told is sweetened with either maltose or lactose....

General Management
1.2K views

ANALYSIS ON COMPANY (Comcast) COMCAST internal analysis: What are COMCAST's core competencies? COMCAST's VRIO framework? Competitive Implications? COMCAST life...

Biology
1.2K views

LC2 Changes Over The development of antibiotic r Bacteria decide which tra Bacteria cannot reproduc

Biology
1.2K views

1 Use the information found in module three to help you complete this assignment Inform...

Physics
1.2K views

4 inversely proportional to h Two drops of equal radius are falling the 060 6...

Statistics
1.2K views

To determine her air quality Denise divides up her day into three parts morning afternoon...

Algebra
1.2K views

Convert to exponential form then simplify What is under the radical in the numerator of...

Accounting
1.2K views

The salary that is sacrificed by a college student who pursues a degree full time...

Accounting
1.2K views

As the text (Finance and Accounting for Nonfinancial Managers 2017 (5th edition) Steven A. Finkler...

Accounting
1.2K views

A high detection risk equates to a high amount of audit evidence needed. Select one...