You have just won the state lottery and have two choices for collecting your winnings. You can collect $108,000 today or receive $21,300 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments. Required: 1. Calculate the present value of both the options (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Present Value Option 1 Option 2 24 108,000 2. Which alternative should you select? O Option 1 O Option 2

You have just won the state lottery and have two choices for collecting your winnings. You can collect $108,000 today or receive $21,300 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9% on your investments. Required: 1. Calculate the present value of both the options (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Present Value Option 1 Option 2 24 108,000 2. Which alternative should you select? O Option 1 O Option 2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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