You have just received notification that you have won the $3.0 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 66 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? a. $11,374.50 b. $3,060.59 c. $2,999.37 d. $2,815.74 e. $3,121.80

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...
icon
Related questions
Question

Not use ai please don't

You have just received notification that you have won
the $3.0 million first prize in the Centennial Lottery.
However, the prize will be awarded on your 100th
birthday (assuming you're around to collect), 66 years
from now. What is the present value of your windfall if
the appropriate discount rate is 11 percent?
a. $11,374.50
b. $3,060.59
c. $2,999.37
d. $2,815.74
e. $3,121.80
Transcribed Image Text:You have just received notification that you have won the $3.0 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 66 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? a. $11,374.50 b. $3,060.59 c. $2,999.37 d. $2,815.74 e. $3,121.80
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College