Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the winner of a lottery is awarded $4,000,000 to b

The winner of a lottery is awarded $4,000,000 to be paid in annual installments of...

80.2K

Verified Solution

Question

Accounting

The winner of a lottery is awarded $4,000,000 to be paid in annual installments of $200,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $1,800,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.) $ Should he choose the one-time payment instead? Yes, he should choose the one-time payment. No, he should not choose the one-time payment

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