Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. congratulations! you have won a state lottery. the

Congratulations! You have won a state lottery. The state lottery offers you the following (after-tax)...

50.1K

Verified Solution

Question

Accounting

Congratulations! You have won a state lottery. The state lottery offers you the following (after-tax) payout options:

Option #1: $15,000,000 after five years.

Option #2: $2,150,000 per year for five years.

Option #3: $13,000,000 after three years.

Assuming you earn 8% on your funds, which option would you prefer?

Requirements:

Find PV of each option, and determine which is the best option.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

8) (1 point) Melanism in Moths. Melanism is the process by which animals produce melanin to...

Statistics
Q

forty new automobile were tested for fuel efficiency by the Environmental protection Agency (in mile per...

Statistics
Q

You are considering a proposal to produce and market a new sluffing machine. The most likely...

Finance
Q

Outline the definitions of abnormal behavior discussed and compare and contrast these definitions in terms of...

Psychology
Q

Cover chapter 2 (solar and IR radiation) and the beginning of chapter 3 (thermodynamics) of the...

Physics
Q

Calculator What is the value of x Enter your answer in the box X 5...

Geometry
Q

Below is a list of the salaries for the starting lineup of the local pro...

Basic Math
Q

Graphs of two functions y f x in blue and y g x in red...

Calculus
Q

What is Harry's total gross income if 1) as airline pilot, he flew free on...

Accounting
Q

During the current year, merchandise is sold for $807000. The cost of the merchandise sold...

Accounting
Q

Answer the questions for each of the following independent situations on Accounting Changes and Errors....

Accounting
Q

Wallgasse Company has two service departments (S1 and S2) and two producing departments (P1 and...

Accounting