A lottery administrator has just completed the state's most recent P50 million lotteries. Receiptsfrom lottery sales were P50 million and the payout will be P5 million at the end of each year for 10years. The expenses of running the lottery were PS00,000. The state can earn an annual compoundrate of8 percent on any funds invested(a) Calculate the gross profit to the state from this lottery.(b) Calculate the net profit to the state from this lottery (no taxes).6.

given that, receipts from The sale of lottery = P50Million Payout will be P5 Million at the end of…

A lottery administrator has just completed the state's most recent P50 million lotteries. Receipts from lottery sales were P50 million and the payout will be P5 million at the end of each year for 10 years. The expenses of nunning the lottery were P800,000. The state can carn an annual compound rate of 8 percent on any funds invested (a) Calculate the gross profit to the state from this lottery. (b) Calculate the net profit to the state from this lottery (no taxes).

A lottery administrator has just completed the state's most recent P50 million lotteries. Receipts from lottery sales were P50 million and the payout will be P5 million at the end of each year for 10 years. The expenses of nunning the lottery were P800,000. The state can carn an annual compound rate of 8 percent on any funds invested (a) Calculate the gross profit to the state from this lottery. (b) Calculate the net profit to the state from this lottery (no taxes).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The State of Texas has a pension fund liability of $25 million, due in 10 years. Each year the legislature is supposed to set aside an annuity to arrive at this future value. This annuity is based on what the legislature believes it can earn on this money. Estimate the annuity needed each year for the next 10 years, assuming that the interest rate that can be earned on the money is 6%. $1,896,699 $3,657,129 $6,687,085 $4,675,987
2,500 is deposited into Fund X, which earns an annual effective rate of zero. At the end of each year, 10% of the balance is withdrawn from the fund. The annual withdrawals are deposited into Fund Y, which earns an annual effective rate of 10%. Determine the accumulated value of Fund Y at the end of year 10. a) 2,806 b) 2,252
On January 1, you win $5,000,000 in the state lottery. The $5,000,000 prize will be paid in equal installments of $500,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use Table 3. Round to the nearest whole dollar.
The University is given a gift of $500000 for the construction of a School of Management building. The University invests the gift into an account for future use. The University receives 8.00% on the money for 7 years then the rate drops to 6.40%. If the building is constructed 23 years after the gift was received, how much is in the fund at that time? S Do not use dollar signs or commas in your answer. Include two decimals. in your answer.
The Metropolitan Museum has received a charitable donation of $2,000,000, which is to be used to purchase new exhibits at the end of every three months. If the money earns 12% compounded annually, how much could be paid out every three months in perpetuity? $24,000 $60,000 $57.475 $114, 704
(Related to Checkpoint 6.2) (Present value of annuity payments) The state lottery's million-dollar payout provides for $1 million to be paid in 25 installments of $40,000 per payment. The first $40,000 payment is made immediately, and the 24 remaining $40,000 payments occur at the end of each of the next 24 years. If 12 percent is the discount rate, what is the present value of this stream of cash flows? If 24 percent is the discount rate, what is the present value of the cash flows? a. If 12 percent is the discount rate, the present value of the annuity due is $ b. If 24 percent is the discount rate, the present value of the annuity due is $ *** (Round to the nearest cent.) (Round to the nearest cent.)
Find the periodic payment for each sinking fund that is needed to accumulate the given sum under the given conditions. (Round your answer to the nearest cent.) FV = $1,500,000, r = 4.7%, compounded semiannually for 25 years
Project for Ma Consider a nominal prize of one million dollars, to be paid in twenty annual payments of $50,000. Assume when each payment is made, the recipient immediately pays Federal income tax at a 25% rate and invests the rest. Assume the funds invested eam 6% per year, with both Federal taxes paid from that income and the remainder reinvested. The Assignment 1. Determine the total amount of money the winner will have at the end of twenty years. This will be one year after the last payment 2. Determine the amount the winner would have had at the end of twenty years if he or she had been given one million dollars all at once under the same conditions regarding taxes and Investment. 3. Determine the amount for a lump sum payment that would leave the winner with the same amount as the annuity after twenty years. 1. Discuss assumptions that were made to simplify this assignment along with important factors that have been omitted.