50.1K

Verified Solution

Link Copied!

E9-18 (Algo) Using Present Value Concepts for Decision Making LO 9-7 You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or recelve $20.700 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9 percent on your investments. Required: 1. Calculate the present value of both the options (EV of \$1, PV of S1, EVA of S1, and PVA of \$1) Note: Use appropriate factor(s) from the tables provided. 2. Which alternative should you select? Answer is not complete. Complete this question by entering your answers in the tabs below. 2. Which alternative should you select? Answer is not complete. Complete this question by entering your answers in the tabs below. Calculate the present value of both the options. Note: Round your answers to nearest whole dollar. Present Value of Annulty of $1 Present Volue of Annuity of $1 \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline Periads & 0.0x & 2.01 & 10.08 & 11.0x & 12.0N & 1208 & 16.0N & 15.0% & 20.0s & A.os \\ \hline 1 & 092593 & 091743 & 0.50509 & 0.5000 & 0.89286 & Q83es6 & osm19 & 0.06557 & 0.2533 & 0.80000 \\ \hline 2 & 1.72326 & 175911 & 173554 & 171252 & 169005 & 166810 & 154615 & 1.62571 & 15mm & 1.44000 \\ \hline 3 & 257710 & 253129 & 248685 & 240371 & 240183 & 236115 & 232163 & 22833 & 2106cs & 1.95200 \\ \hline 4 & 3.31213 & 323972 & 3.16357 & 210245 & 300735 & 297401 & 29131 & 2.s549e & 2sea73 & 236160 \\ \hline 5 & 399271 & 388965 & 379079 & 3.69590 & 36048 & 25173 & & 3.35216 & 299061 & 260928 \\ \hline 6 & 4.622Ba & 4.45592 & 435526 & 4.23054 & Q.11141 & 1 minss & & 37 sems & 332551 & 295142 \\ \hline , & 5.20637 & 503295 & 4 aca4z & 471220 & 456376 & 4.02261 & 42at30 & 4.15042 & 160459 & 3.16114 \\ \hline e & 5.74664 & 553ck2 & 5.3493 & 514612 & 496764 & 4 & 4 cestes & & & 332091 \\ \hline 9 & 6.24689 & 599525 & 575902 & 553705 & & 5.13165 & 49697 & enisa & 400097 & 2.46]13 \\ \hline 10 & 6.71000 & 6.41766 & 6.14457 & 5ktg23 & 5.65022 & 542524 & 521612 & 50107 & 419247 & 357050 \\ \hline \multicolumn{11}{|c|}{\begin{tabular}{l} Present Value of Annuity of $1 \\ Periots \end{tabular}} \\ \hline Periedn & 0.0x & 2.0s & 10.0s & 11.0N & 12.0s & 12.0x & 16ms & 15.08 & 20.05 & 25.05 \\ \hline 11 & 213096 & 6.00519 & 6.49506 & 620652 & sin0 & 5.66694 & 5.45m3 & 5.2331 & 43706 & 155640 \\ \hline 12 & 753600 & 7.16073 & 681369 & 6.49236 & 6.19437 & 59105 & scoses & 5.42062 & 4.43m & 272512 \\ \hline 13 & 79007s & 7.48690 & 7.10336 & 6.74927 & 6.42355 & 6.12141 & 5:4235 & 5.58315 & 453269 & 375010 \\ \hline 14 & 824424 & 7.78615 & 7x669 & 6.98187 & 6 62an & 630263 & 600207 & 5.724a & 4.61057 & 382408 \\ \hline 15 & 255943 & 0.06063 & 760008 & 7.19007 & 681045 & 6.4523 & 6.14217 & 5.34737 & 4.57547 & 385926 \\ \hline 16 & 8.85137 & 131256 & 782371 & 737916 & 697 & 6.6034 & 626506 & 595423 & 472056 & 289741 \\ \hline 17 & 9.12164 & 0.54363 & 802155 & 754879 & 7.1193 & snos & c.mens & 6.04716 & 4.7763 & 3.90mJ \\ \hline 18 & 3.37189 & 8.75563 & 820141 & 7.70162 & 7.24867 & 680m1 & 64579 & 6.12797 & 4:1219 & 392794 \\ \hline 19 & 960360 & 8.95011 & & 7.83925 & 736578 & 691797 & csson & 5.19m & 40050 & 394235 \\ \hline 20 & 981815 & 9.12855 & es1356 & 79631 & 7.46944 & 70245 & 602313 & 6.25933 & 4.06s54 & 3.95389 \\ \hline 25 & 1067478 & & somos & 2.42174 & 7.44314 & rarms & cans & 6.46415 & 43473 & 396439 \\ \hline 30 & 11.25778 & 10.27365 & 9.42691 & 8.69379 & eossit & Thass & 7.00265 & 6 ses9a & 49759 & 3.99505 \\ \hline \end{tabular}

Answer & Explanation Solved by verified expert

See Answer