Question
You have just won a new lottery game. You are now faced with a choice: You can either receive 30 annual payments of $10, 000
You have just won a new lottery game. You are now faced with a choice: You can either receive 30 annual payments of $10, 000 each with the first payment coming today (Option 1) or receive 20 annual payments of $20,000 each with the first payment coming 10 years from today (Option 2). If the interest rate is 6%, determine the present value of each option.
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Calculation of present value of option 1 Present value Annual Cashflow 11i n 11i 1 10000 11006 30 1...
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
6th Canadian edition
1118644948, 978-1118805084, 1118805089, 978-1118644942
