You win the lottery and must decide how to take the payout. Use an 8% discount rate for all parts of this question.
Required:
1. What is the present value of $10,000 a year received at the end of each of the next six years?
2. What is the present value of taking a $50,000 lump sum now?
3. What is the present value of a $85,000 lump sum taken in 7 years?
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q105: If you invest $5,000 at the end
Q108: Assuming an interest rate of 6%,if you
Q114: Your best friend just received a gift
Q114: Assuming an interest rate of 6%,the present
Q115: Assume that you want to retire early
Q119: James wants to take the next three
Q120: Your best friend just received a gift
Q122: If the discount rate is increased from
Q123: If the discount rate is decreased from
Q136: When selecting a capital investment project from
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents