Daniel has just won the Flyball Lottery. Ha has tvo options for recsiving his prize. The first optionis to accesta $134000 cash paymant today. Tha second option is to receive $23,400 at the end of cach of the next 19 years anda $27,200 lumpsum paymant in the 20th year. Danialcan imvest monay ata 10% rate. Clickhere toviawthe factor table (a) Calculate the presant valus of the twooptions. For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to O decimal place, es 58,971) Option 1 Option 2 Present valus Which option should Daniel choose to recaive his winnings? ) IF Danial could invest money at 139, calculats the presant valus of the two options. (For calaulation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to Odecimal place, eg 58,971) Option 1 Option 2 Presant valus Which option should he choos?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Daniel has just won the Flyball Lottery. Ha has two options for receiving his prize. The first option is to accept a $134,000 cash
payment today. The second option is to receive $23,400 at the end of sach of the next 19 years and a $27,300 lump sum payment in
the 20th year. Daniel can invest money ata 10% rate.
Click hare 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 O decimal place, eg. 58,971)
Option 1
Option 2
Present valus
Which option should Daniel choose to receive his winnings?
(b) IF Daniel could invest money at 13%, calculats the present valus of the two options. (For calculation purposes, use 4 decimal places as
displayed in the factor table provided and round final answer to O decimal place, eg 58,971)
Option 1
Option 2
Present valus
Which option should he choosa?
Transcribed Image Text:Daniel has just won the Flyball Lottery. Ha has two options for receiving his prize. The first option is to accept a $134,000 cash payment today. The second option is to receive $23,400 at the end of sach of the next 19 years and a $27,300 lump sum payment in the 20th year. Daniel can invest money ata 10% rate. Click hare 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 O decimal place, eg. 58,971) Option 1 Option 2 Present valus Which option should Daniel choose to receive his winnings? (b) IF Daniel could invest money at 13%, calculats the present valus of the two options. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to O decimal place, eg 58,971) Option 1 Option 2 Present valus Which option should he choosa?
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