6. Joe Black just won a $550,000 lottery in Pennsylvania. Instead of receiving a lump sum, he found that he would receive $25,500 annually (end of year) for 20 years. Joe is 75 years old and wants his money now. He has been offered $140,827 to sell his ticket. What rate of return is the buyer expecting to make if Joe accepts the offer?

7. Great Subs believes it can increase sales by 50 percent without any increase in net fixed assets (All other assets will increase and accounts payable). Earnings after tax are expected to be $2,000. The company pays no dividends. What additional financing will Subs need to finance this growth? Subs balance sheet currently is as follows:

Cash	$ 2,500		Accounts payable	$ 5,600
Accounts Rec.	4,400		Notes payable	10,000
Inventory	6,000		Long-term debt	15,000
Fixed assets, net	47,700		Stockholder's equity	30,000
	$60,600			$60,600