Question
Deborah Gianoulis won $6.5 million in the Georgia Lottery. She must choose how she wants her prize to be paid. First, Deborah can elect to
Deborah Gianoulis won $6.5 million in the Georgia Lottery. She must choose how she wants her prize to be paid. First, Deborah can elect to receive 26 annual payments, with the first payment due immediately. Second, she can elect to receive a single payment for the entire amount. However, if the single payment option, the winning prize is reduced to 60% of the winning. What rate would make Deborah indifferent about these two options?
26 Annual Payments
N = I/Y = PV = PMT = FV =
1 Payment
Amount:
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Auditing Concepts For A Changing Environment With IDEA Software
Authors: Larry E. Rittenberg, Bradley J. Schwieger
4th Edition
0387321500, 978-0324180237
