Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 09, 2021

You won the lottery for 10 million the winner receives 500,000 today and 19 annual payments of 500,000. A lump sum of 5 million payable

You won the lottery for 10 million the winner receives 500,000 today and 19 annual payments of 500,000. A lump sum of 5 million payable immediately is available. What factors should you take into account deciding wether you should take the annuity option or the lump sum?

Step by Step Solution

★★★★★

3.41 Rating (151 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

635f9e2ef2936_232899.pdf

180 KBs PDF File

635f9e2ef2936_232899.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Banking and Financial Markets

Money Banking and Financial Markets

Authors: Stephen Cecchetti, Kermit Schoenholtz

4th edition

007802174X, 978-0078021749

More Books

Students also viewed these General Management questions

Question

★★★★★

What factors should you take into account when considering using the following assets as stores of value? a. Gold b. Real estate c. Stocks d. Government bonds

Answered: 1 week ago

Question

★★★★★

You won the lottery and paid you $100,000 per year for the next 10 years. Assuming that you placed your winnings in an investment account, how much would that amount grow if you earned 6% during that...

Answered: 1 week ago

Question

★★★★★

1. What factors should companies take into consideration when making the decision between developing their own applications, purchasing them from a vendor, or taking the SaaS route, as discussed...

Answered: 1 week ago

Question

★★★★★

A 100-m-long conductor of uniform cross section has a voltage drop of 4 V between its ends. If the density of the current flowing through it is 1.4 x 106 (A/m2), identify the material of the...

Answered: 1 week ago

Question

★★★★★

The Four Brothers Lumber Company is considering buying a machine that planes lumber to the correct thickness. The machine is advertised to produce 6-inch lumber having a thickness that is normally...

Answered: 1 week ago

Question

★★★★★

The partially complete ANOVA table given next is for a two-factor factorial experiment. a. Give the number of levels for each factor. b. How many observations were collected for each factorlevel...

Answered: 1 week ago

Question

★★★★★

A continuous variable X has density function f (x) = 3x2, 0 x b. The value of b is (a) 1 (b) 13 (c) 3 (d)3 3 (e) 3 2

Answered: 1 week ago

Question

★★★★★

Acme, Inc., incurs the following costs during May: Sales expense . . . . . . . . . . . . . . . . $ 11,500 Direct labor . . . . . . . . . . . . . . . . . . 26,000 Factory supplies . . . . . . . . . ....

Answered: 1 week ago

Question

★★★★★

didn't even answer the question fr

Answered: 1 week ago

Question

★★★★★

A steam power plant operating on a regenerative cycle, as illustrated in Fig. 8,5, includes just one feed water healer. Steam enters the turbine at 650(psia) and 900(oF) and exhausts at 1(psia)....

Answered: 1 week ago

Question

★★★★★

What are the advantages the developing nations has as compared to the developed nations during their public transport developing stages. Mention at least three, use an example to justify why the...

Answered: 1 week ago

Question

★★★★★

Case D Mr. Smith was transferred from the Coronary Care Unit to a semi-private room in Hapless Hospital. He decided to leave the hospital because he did not like his new accommodations or having a...

Answered: 1 week ago

Question

★★★★★

Think about Goleman's 6 leadership styles, and discuss how you think Goleman's leadership styles relate to the 4 quadrants of EI and the leadership styles outlined in this leadership questionnaire....

Answered: 1 week ago

Question

★★★★★

In explaining why monetary policy did not pull Japan out of a recession in the early 2000s, an official at the Bank of Japan was quoted as saying that despite "major increases in the money supply"...

Answered: 1 week ago

Question

★★★★★

2. [4 points] Find the constrained minimum and maximum values of the function f(x, y) = (x-2y)2 subject to the constraint x + y = 5, as well as all points at which they occur.

Answered: 1 week ago

Question

★★★★★

The FDIC asserted gross negligence by Crowe. Allegedly, there was concealment and collusion to pep petrate a fraud within the bank and from outside sources. Crowe was held to the AICPA's standards...

Answered: 1 week ago

Question

★★★★★

El ingreso de Magnum Corporation antes de impuestos es de $ 200,000 por ao y no tiene intereses. gastos. Tiene $2 millones en capital y est planeando una expansin de $500,000 para satisfacer demanda...

Answered: 1 week ago

Question

★★★★★

If you want to solve a minimization problem by applying the geometric method to the dual problem, how many variables and problem constraints must be in the original problem?

Answered: 1 week ago

Question

★★★★★

Provide arguments for and against the proposition that a central bank should be allowed to set its own objectives.

Answered: 1 week ago

Question

★★★★★

Under what circumstances might money in the form of currency be the best option as a store of value?

Answered: 1 week ago

Question

★★★★★

Advances in technology have facilitated the widespread use of credit scoring by financial institutions in making their lending decisions. Credit scoring can be defined broadly as the use of...

Answered: 1 week ago

Question

★★★★★

Alladin Company purchased Machine #201 on May 1, 2019. The following information relating to Machine #201 was gathered at the end of May....

Answered: 1 week ago

Question

★★★★★

On January 1, 2017, a machine was purchased for $90,000. The machine has an estimated residual value of $6,000 and an estimated useful life of 5 years. The machine can operate for 100,000 hours...

Answered: 1 week ago

Question

★★★★★

Nieland Industries had one patent recorded on its books as of January 1, 2019. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2019, Nieland incurred research...

Answered: 1 week ago

Previous Question Next Question