Spivey just won the Powerball lottery! The $20,000,000 jackpot will be paid in 20 annual installments of $1,000,000 each, with the first payment to be paid immediately. Spivey’s opportunity cost of capital (interest rate) is 6% per year. What is the present equivalent of Spivey’s lottery winnings at the time of the first payment?

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A: *Answer:

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A:

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Q: 1000 750 ÏILLE 500 1250 250

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A:

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Q: Suppose an investment is project to generate income at the rate of  R(t) = 200, 000 dollars per year…

A: * SOLUTION :-

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A: We are going to use present value approach to answer this question.

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