Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. which option would you select if you had the chose

Which option would you select if you had the chose of receiving $1 million dollars in...

60.1K

Verified Solution

Question

Finance

Which option would you select if you had the chose of receiving$1 million dollars in lottery or $100,00 a year over the next 10years. Current 10 year interest rates are at 5% and the current taxon lottery winnings is 40%. Explain!

Answer & Explanation Solved by verified expert
3.9 Ratings (475 Votes)
We have to calculate the present value of both the alternatives and check which alternative has higher present value First we will take the present value of 100000 a year over the next 10 years as per below After    See Answer
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

Transcribed Image Text

Which option would you select if you had the chose of receiving$1 million dollars in lottery or $100,00 a year over the next 10years. Current 10 year interest rates are at 5% and the current taxon lottery winnings is 40%. Explain!

Other questions asked by students

Psychology
1.2K views

In many cultures, there are rules about who can marry whom. One such arrangement involves marrying...

Biology
1.2K views

What happened as the mass of the Sun increased during the formation of the solar...

Physics
1.2K views

The objective of an astronomical telescope has a focal length of 80 cm The telescope...

Physics
1.2K views

ch the following items Column I A Work done by all the forces B Work...

Basic Math
1.2K views

If you deposit $100 at the end of each month in a bank account with...

Calculus
1.2K views

Complete the congruence statement I 29 yd F H 23 yd G S T R...

Algebra
1.2K views

A sin B cos B tan B 15 B 8 C sin A cos A...

Accounting
1.2K views

An office that dispenses automotive licenses plates has divided its customers into categories to level...

Accounting
1.2K views

stock market integration between china and pakistan

Accounting
1.2K views

Danielle Vanderbilt would like to calculate her RRSP annual limit and needs your assistance in...

Accounting
1.2K views

The Vulcan Community Hospital purchased $1,500,000 worth of an MRI. The hospital paid $6,000 for...

Accounting
1.2K views

Check my Oakmont Company has an opportunity to manufacture and sell a new product for...