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.
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- You just won the Florida lottery. To receive your winnings, you must select ONE of the twofollowing choices:1. You can receive $1,000,000 a year at the end of each of the next 30 years.2. You can receive a one-time payment of $15,000,000 today.Assume that the current interest rate is 6%. Which option is most valuable?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,Assume you won a million dollars in the Texas Lottery. You have two options: 1) collect S426,000 now or 2) receive $50,000 a year (end-of-year) for the next 20 years. Which option would you opt for assuming a 10% interest rate? Use an Excel formula to justify your choice.
- As a prize, you are offered of one of the following three options:Option 1: $6,000 today, orOption 2: $8,500 in five years, orOption 3: $10,000 in seven years.Assuming you can earn 7% on your money, which option should you choose. (Brieflyexplain your choice and show all working to justify your answer.)You 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)You have just won the state lottery and have two choices for collecting your winnings. You can collect $111,000 today or receive $21,900 at the end of each year for the next seven years. A financial analyst has told you that you can earn 9 percent 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) Note: Use appropriate factor(s) from the tables provided. 2. Which alternative should you select?
- 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 are the lucky winner of the $30 million state lottery. You can take your prize money either as (a) 30 payments of $1 million per year (starting in one year), or (b) $15 million paid today. If the interest rate is 5.5%, which option should you take? Select one: a. Option a, as it is equivalent to 15 333 101 $ b. Option a, as it is equivalent to 15 141 074 $ c. Option b d. Option a, as it is equivalent to 15 372 451 $You have won the lottery, and you must choose between three award options. You can select one of the following options: To receive a lump sum today of $75 million, To receive 10 end-of-year payments of $12 million, to receive 30 end-of-year payments of $8 million. If you expect to earn 9% annually: What is the present value of alternative ii? What is the present value of alternative iii? Which one you must choose?
- The florida lottery agrees to pay the winner $285,000 at the end of each year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08?You have just won the state lottery and have two choices for collecting your winnings. You can collect $105,000 today or receive $20,700 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 (EV. of $1. PV or $1. EVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.) Present Value 105,000 Option 1 Option 2 2. Which alternative should you select? O Option 1 O Option 2You 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