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Question 19 of 20 View Policies -/2 E : Current Attempt in Progress The top prize for the state lottery is $101,100,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $101,100,000 in 24 equal payments of $4,212,500-one payment today and one payment at the end of each of the next 23 years. If you choose the cash payment, you will receive a one-time lump sum payment of $51,696,589.34. You can invest the proceeds and earn 8%. At what interest rate would you be indifferent between the cash and annual payment options? (Round factor values to 8 decimal places, e.g. 1.52137846 and final answer to O decimal places, e.g. 15%.) Click here to view the PV Table. Interest rate Save for Later di % Attempts: 0 of 1 used = SUPPORT

Question 19 of 20 View Policies -/2 E : Current Attempt in Progress The top prize for the state lottery is $101,100,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $101,100,000 in 24 equal payments of $4,212,500-one payment today and one payment at the end of each of the next 23 years. If you choose the cash payment, you will receive a one-time lump sum payment of $51,696,589.34. You can invest the proceeds and earn 8%. At what interest rate would you be indifferent between the cash and annual payment options? (Round factor values to 8 decimal places, e.g. 1.52137846 and final answer to O decimal places, e.g. 15%.) Click here to view the PV Table. Interest rate Save for Later di % Attempts: 0 of 1 used = SUPPORT

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.20MCE
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Question 19 of 20 View Policies -/2 E : Current Attempt in Progress The top prize for the state lottery is $101,100,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $101,100,000 in 24 equal payments of $4,212,500-one payment today and one payment at the end of each of the next 23 years. If you choose the cash payment, you will receive a one-time lump sum payment of $51,696,589.34. You can invest the proceeds and earn 8%. At what interest rate would you be indifferent between the cash and annual payment options? (Round factor values to 8 decimal places, e.g. 1.52137846 and final answer to O decimal places, e.g. 15%.) Click here to view the PV Table. Interest rate Save for Later di % Attempts: 0 of 1 used = SUPPORT
Transcribed Image Text:Question 19 of 20 View Policies -/2 E : Current Attempt in Progress The top prize for the state lottery is $101,100,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $101,100,000 in 24 equal payments of $4,212,500-one payment today and one payment at the end of each of the next 23 years. If you choose the cash payment, you will receive a one-time lump sum payment of $51,696,589.34. You can invest the proceeds and earn 8%. At what interest rate would you be indifferent between the cash and annual payment options? (Round factor values to 8 decimal places, e.g. 1.52137846 and final answer to O decimal places, e.g. 15%.) Click here to view the PV Table. Interest rate Save for Later di % Attempts: 0 of 1 used = SUPPORT
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