You Have Just Won a $5 Million Lottery to Be

question 152

Multiple Choice

You have just won a $5 million lottery to be received in twenty annual equal payments of $250,000. What will happen to the present value of your winnings if the interest rate increases?

• A)It will be worth less.
• B)It will be worth more.
• C)It will not change.
• D)None of the above

---

Definitions:

ATC Curve

Represents the Average Total Cost per unit of output produced, which is calculated by dividing the total cost by the quantity of output.

Non-price Competition

Strategies used by companies to attract customers through methods other than lowering prices, such as product differentiation and marketing.

Profit-maximizing

A strategy or point where a firm reaches its highest possible profit under given market conditions, taking into account costs and revenue.

Loss

A situation in which a business's expenses exceed its revenues over a specific period, resulting in negative profit.