Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. lottery. your dreams of becoming rich have just co

Lottery. Your dreams of becoming rich have just come true. You have won the State...

90.2K

Verified Solution

Question

Accounting

image
Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $6,000,000 advertised jackpot. You can take annual payments of $240,000 at the end of the year for the next 25 years or $2,796,860 today. a. If your investment rate over the next 25 years is 9%, which payoff will you choose? b. If your investment rate over the next 25 years is 5%, which payoff will you choose? C. At what investment rate will the annuity stream of $240,000 be the same as the lump-sum payment of $2,796,860? Which payoff will you choose? (Select the best response.) O A. Choose the annual payments of $240,000 for the next 25 years because its present value is higher. OB. Choose the lump-sum payment of $2,796,860 today because its future value is lower, OC. Choose the annual payments of $240,000 for the next 25 years because its future value is lower. D. Choose the lump-sum payment of $2,796,860 today because its present value is higher.. b. If your investment rate over the next 25 years is 5%, what is the present value of the $240,000 annual payments today? (Round to the nearest dollar)

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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

ents will design an infor Biome specific information precip temp Fauna Flora Foodweb fiyer about...

Biology
Q

Question 5. Classify the main rock types with their characterics features (also indicate main subdivisions), and give...

Civil Engineering
Q

What is the difference in cross-sectional, longitudinal and time-lag comparison research design? Explain the research designs and...

Psychology
Q

On January 1, 20X8, Liv Ltd. (LL), a Canadian company, acquired 90% of Marcus Co. (MC),...

Accounting
Q

6 What is one concern with the use of genetically engineered herbicide tolerant crops decreased...

Biology
Q

These are queries that use the full Red Cat Database as shown in Figure 3...

Basic Math
Q

Frank earns $40,000 one year and receives a 6% raise in salary. What is his...

Basic Math
Q

Television and radio stations use four call letters starting with W or K, such as...

Basic Math
Q

Find the limit If needed enter Inf for co Inf for o or dne if...

Calculus
Q

Trina Corp has total assets of $131,000. If total liabilities are $54,300, find the debt-to-equity...

Accounting
Q

Glen Co. acquires 100 percent of the outstanding voting shares of Nutley Company on January...

Accounting
Q

The 2nd unit of a 10-unit job took eight hours to complete. The 6th unit...

Finance