You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $660,000 per year. Thus, in one year, you receive $1.66 million. In two years you get $2.32 million, and so on. If the appropriate interest rate is 7.6 percent, what is the value of your winnings today?

You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $660,000 per year. Thus, in one year, you receive $1.66 million. In two years you get $2.32 million, and so on. If the appropriate interest rate is 7.6 percent, what is the value of your winnings today?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Similar questions

You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year, you can receive $1.45 million. In two years, you get $1.9 million, and so on. If the appropriate interest rate is 6.2 percent, what is the value of your winnings today? (Please also provide financial calculator calculations if possible)
You just won the lottery, which promises you $440,000 per year for the next 20 years. You receive the first payment today (hint: annuity due). If your discount rate is 9.00%, what is the present value of your winnings?
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $580,000 per year. Thus, in one year, you receive $1.58 million. In two years you get $2.16 million, and so on. If the appropriate interest rate is 6.8 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) present value is ?
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $510,000 per year. Thus, in one year you receive $1.51 million. In two years, you get $2.02 million, and so on. If the appropriate discount rate is 6.1 percent, what is the value of your winnings today?
Congratulations, you just won the lottery! As the winner, you will receive payments of $2 million at the beginning of every year over the next 10years. The first payment will be paid out already today. What is the present value of your lottery winnings? Assume an interest rate of 5% per year. Answer in millions of dollars with 2 decimals (for example, if your answer is 12, 160,000 enter 12.16).
you have just won the lottery and will receive $460,000 in one year. you will receive payments for 21 years, and the payments will increase 4 percent per year. if the appropriate discount rate is 11 percent, what is the present value of your winnings? Please explain how to solve using the financial calculator to show and explain steps thanks
You have just won a lottery that promises an annual payment of $120000 beginning immediately. You will receive a total of 15 payments. If you can invest the cash flow in an investment that is paying 8% annually, what is the present value of this annuity?
You just won a $625,000 lottery prize! You will receive $25,000 per year for the next 25 years, starting today, a total of $625,000. If the current interest rate is 1.9% compounded annually, what is the cash value of this prize?
Suppose you are going to invest $11,000 per year for six years. The appropriate interest rate is 9 percent. What is the future value if the payments are made on the last day of the year? What if the payments are made on the first day of the year? a) $82,756.68; $90,204.78 b) $90,204.78; $82,756.68 c) $49,345.10; $53,786.16 d) $53,786.16; $49,345.10
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $700, 000 per year. Thus, in one year you receive $1.70 million. In two years, you get $2.40 million, and so on. If the appropriate discount rate is 8.0 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e. g., 1,234,567.89.)
You have an investment opportunity that promises to pay you $18, 499 in four years. Suppose the opportunity requires you to invest $15,813 today. What is the interest rate you would earn on this investment?
You have just won 50 million in the lottery, payable in equal yearly installments over the next 20 years (first payment to be made immediately). Instead of taking the annual payments, you also have the option of receiving a lump sum amount immediately. If the interest rate is 6% per year, what is the minimum lump sum amount you would except in place for the payments? What if the interest rate is 10% per year? Please show the formula and answer.