Critical thinking and concepts review. I need someone to solve these parts for me please. Thank you in advance
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PART 3 Valuation of Forure Cash Flows 3.3 5.5 Annuity Present Values. Tri-State Megabucks Lottery advertises a $10 million grand prize. The winner receives $500,000 today and 19 annual payments of $500,000. A lump sum option of $5 million payable immediately is also available. Is this deceptive advertising? 5.4 Annuity Present Values. Suppose you won the Tri-State Megabucks Lottery in the previous question. What factors should you take into account in deciding whether you should take the annuity option or the lump sum option? Present Value. If you were an athlete negotiating a contract, would you want a big signing bonus payable immediately and smaller payments in the future, or vice versa? How about looking at it from the team's perspective? 5.6 Present Value. Suppose two athletes sign 10-year contracts for $80 million. In one case, we're told that the $80 million will be paid in 10 equal installments. In the other case, we're told that the $80 million will be paid in 10 installments, but the installments will increase by 5 percent per year. Who got the better deal? 5.7 APR and EAR. Should lending laws be changed to require lenders to report EARs instead of APRs? Why or why not? Time Value. On subsidized Stafford lots, a common source of financial aid for college students, interest does not begin to accrue until repayment begins. Who receives a bigger subsidy, a freshman or a senior? Explain. 5.9 Time Value. In words, how would you go about valuing the subsidy on a subsidized Stafford loan? 5.10 Time Value. Eligibility for a subsidized Stafford loan is based on current financial need. However, both subsidized and unsubsidized Stafford loans are repaid out of future income. Given this, do you see a possible objection to having two types? 5.8 PART 3 Valuation of Forure Cash Flows 3.3 5.5 Annuity Present Values. Tri-State Megabucks Lottery advertises a $10 million grand prize. The winner receives $500,000 today and 19 annual payments of $500,000. A lump sum option of $5 million payable immediately is also available. Is this deceptive advertising? 5.4 Annuity Present Values. Suppose you won the Tri-State Megabucks Lottery in the previous question. What factors should you take into account in deciding whether you should take the annuity option or the lump sum option? Present Value. If you were an athlete negotiating a contract, would you want a big signing bonus payable immediately and smaller payments in the future, or vice versa? How about looking at it from the team's perspective? 5.6 Present Value. Suppose two athletes sign 10-year contracts for $80 million. In one case, we're told that the $80 million will be paid in 10 equal installments. In the other case, we're told that the $80 million will be paid in 10 installments, but the installments will increase by 5 percent per year. Who got the better deal? 5.7 APR and EAR. Should lending laws be changed to require lenders to report EARs instead of APRs? Why or why not? Time Value. On subsidized Stafford lots, a common source of financial aid for college students, interest does not begin to accrue until repayment begins. Who receives a bigger subsidy, a freshman or a senior? Explain. 5.9 Time Value. In words, how would you go about valuing the subsidy on a subsidized Stafford loan? 5.10 Time Value. Eligibility for a subsidized Stafford loan is based on current financial need. However, both subsidized and unsubsidized Stafford loans are repaid out of future income. Given this, do you see a possible objection to having two types? 5.8
