A lottery winner is given the choice of receiving a lump sum amount of $450,000 or a monthly perpetuity starting in the upcoming month. At what perpetuity amount are both options equal for the lottery winner given their required annual rate of return of 12%? Selected Answers: Answers: $4,500 $4,500 $4,545 $54,000 $60,480
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- Joan Lucky won the $66 million lottery She is to receive $2.3 million a year for the next 25 years plus an additional lump-sum payment of $8.5 million after 25 years. The discount rate is 11 percent What is the current value of her winnings? Use Appendix B and Appendix D. (Provide answers in terms of millions of dollars. Round "PV Factor" to 3 decimal places. Round the final answer to the nearest whole dollar.) Current Value %24 19.995You Answered Correct Answers You won the lottery. You could receive $100,000 a year for the next 10 years or a lump sum today. The lottery uses a 12 percent discount rate (compounded annually). What would be the lump sum amount you would receive today? 632,824.98 565,022.3 (with margin: 100)A lottery winner will receive $1 million at the end of each of the next twelve years. What is the future value (FV) of her winnings at the time of her final payment, given that the interest rate is 8.1% per year? A. $19.09 million B. $30.54 million C. $26.73 million D. $15.27 million
- Dmitri just won the lottery and must choose between three award options: 1. A lump sum of $20,000,000 received today 2. 15 end-of-year payments of $2,500,000 3. 40 end-of-year payments of $1,800,000 For each option in the table, indicate which values to enter for each variable in your financial calculator. Option 1 Option 2 Option 3 Lump Sum Payment 15 Payments 40 Payments No. of Periods I/YR V = 15 ▼ I/YR V = 40 Annual payment %3D %3D Future Value FV= 0 FV = 0 Present Value $20,000,000 Assume the interest rate is 8.00%, entered as 8 on your financial calculator. Note: Take the absolute value of the present value when answering this question. Using the table you just filled out, along with a financial calculator, yields a present value for option 2 of approximately and a present value for option 3 of approximately (when the interest rate is 8.00%). Based on this, Dmitri should choose option if he seeks to maximize present value.As the winner of a lottery you are promised 15 payments of $0.98 million each year starting a year from now. If the discount rate is 0.095, what is the present value of your winnings? Instruction: Type ONLY your numerical answer in the unit of millions,es You have just received notification that you have won the $2 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 63 years from now. What is the present value of your windfall if the appropriate discount rate is 8 percent? Multiple Choice $14,425.18 $15,679.54 $15.993.13 $15,365.95 $40,135.54
- You won a $2,000,000 lottery that pays out $125548 every year for 11 years. If the lottery makes the first payment today and the effective interest rate is 6.7% what is the “true” value of the prize? Need typed answer only.Please give answer within 45 minutesYou won the lottery. You may receive a one-time cash payout today or receive $340,000 in 13 years. What is the equivalent one-time cash payout today using a 12.00% discount rate? ○ 2,184,006 1,483,588 77,919 74,735You have just received notification that you have won the $2.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 62 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? Multiple Choice $12,395.81 $3,794.39 $3,949.26 $3,562.08 $3,871.82
- Question: Congratulations! You have won a state lottery. The state lottery offers you the following (after- tax) payout options: 1. $14,000,000 after five years 2. $2,000,000 per year for five years 3. $13,000,000 after three years Present value of the payout, Option #1 is $ Round your answer to the nearest dollar.You have just won the lottery and will receive $580,000 in one year. You will receive payments for 28 years, which will increase 3 percent per year. The appropriate discount rate is 11 percent. Required: What is the present value of your winnings? $51,626,112 $6,102,947 $6,357,236 $31,217 $51,626,112 Only typed answer and give fastYou have just won a two-part lottery! The first part will pay you $50,000 at the end of each of the next 20 years. The second part will pay you $1,000 at the end of each month over the same 20 year period. Assuming a discount rate of 7%, what is the present value of your winnings? $658,683 $567,572 $529,303 $610,462 $495,048