Question
You have just won the state lottery and have two choices for collecting your winnings. You can collect $115,000 today or receive $22,000 at the
You have just won the state lottery and have two choices for collecting your winnings. You can collect $115,000 today or receive $22,000 at the end of each year for the next seven years. A financial analyst has told you that you can earn 8% 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) (Use the appropriate factor(s) from the tables provided. Round your answers to nearest whole dollar.)
2. Which alternative should you select?
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Option 1
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Option 2
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Auditing Theory And Practice
Authors: C. William Thomas, Bart Ward, Emerson Henke
3rd Edition
0534920748, 978-0534920746
