Question 6 10 pts You just won the lottery. Your payout will start exactly 2 years from now with payment of $80,000 per year forever, which can be transferred to any other person indefinitely. What is the present value of these lottery winnings if the appropriate discount rate is 7%? $1,068,091 O $998,216 O $1,142,857 ○ $800,000 O Infinitely large

Question 6 10 pts You just won the lottery. Your payout will start exactly 2 years from now with payment of $80,000 per year forever, which can be transferred to any other person indefinitely. What is the present value of these lottery winnings if the appropriate discount rate is 7%? $1,068,091 O $998,216 O $1,142,857 ○ $800,000 O Infinitely large

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...

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nt question Q1. Find the present value of 30 annual payments of $2,000 per annum where the first payment is made 14 years from now. So there are 30 annual payments from t=14 to t=43 inclusive. The discount rate is 5% pa. The present value of these payments is: Question 8Select one: a. $4,908.18 b. $16,304.68 c. $21,212.85 d. $30,282.15 e. $30,744.9
Application: Problem Solving 8.1 Suppose you win a million-dollar lottery and are given a choice between $20,000 a year for 50 years (totaling S1,000,000) or immediate payment of S400,000. Suppose the interest rate is 7 percent. Which would you choose? To make the right choice, you need to calculate the present value of the stream of payments. a. How much is the present value of this million-dollar prize? b. Discuss elaborately your analysis based on your calculations.
question 15
Moving to another question will save this response. Question 14 3.3 How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 25 years? Assume an interest rate of 15% and cash flows at the end of each period? OA. $202.52 O B. $573.91 OC. $652.21 O D. $303.57
1On the day you retire you have $500,000 saved. You expect to live another 30 years during which time you expect to earn 8% on your savings while inflation averages 3.5% annually. Assume you want to spend the same amount each year in real terms and die on the day you spend your last dime. What real amount will you be able to spend each year?  a. $61,931.78 b. $79,211.09 c. $79,644.58 d. $30,695.77 2Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 3What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36
What is the present value of $14,000 to be received in one year if the interest rate is 8% p.a.? a. $6000 b. $15120 c. $12963 d. $22000
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