Anthony has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $133,000 cash payment today. The second option is to receive $20,000 at the end of each of the next 19 years and a $33,500 lump sum payment in the 20th year. Anthony can invest money at a 11% rate. Click here to view the factor table. (a) Calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2 Present value $ 2$ Which option should Anthony choose to receive his winnings? Option 2 Option 1 (b) If Anthony could invest money at 14%, calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2 Present value 2$ 2$ Which option should he choose?

Anthony has just won the Flyball Lottery. He has two options for receiving his prize. The first option is to accept a $133,000 cash payment today. The second option is to receive $20,000 at the end of each of the next 19 years and a $33,500 lump sum payment in the 20th year. Anthony can invest money at a 11% rate. Click here to view the factor table. (a) Calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2 Present value $ 2$ Which option should Anthony choose to receive his winnings? Option 2 Option 1 (b) If Anthony could invest money at 14%, calculate the present value of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.) Option 1 Option 2 Present value 2$ 2$ Which option should he choose?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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