You just won the Publisher's Clearing House Sweepstakes and the right to 20 after-tax ordinary annuity cash flows of $163,291.18.Assuming a discount rate of 7.50%,what is the present value of your lottery winnings? Use a calculator to determine your answer.
A)$3,265,823.60
B)$1,789,520.81
C)$1,664,670.52
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

To calculate the present value of the 20 after-tax ordinary annuity cash flows of $163,291.18, we can use the formula: PV = C * ((1 - (1 / (1+r)^n)) / r), where PV is the present value, C is the cash flow, r is the discount rate, and n is the number of periods. Plugging in the given values, we get:
PV = $163,291.18 * ((1 - (1 / (1+0.075)^20)) / 0.075)
PV = $1,664,670.52
Therefore, the present value of the lottery winnings is $1,664,670.52. Option C is the correct choice.

You Just Won the Publisher's Clearing House Sweepstakes and the Right