You Have Just Won the University Lottery

question 58

True/False

You have just won the university lottery.If you graduate,you will receive a refund equal to the amount of tuition you paid in your first four years of school.However,you need money now and a firm that specializes in buying expected future cash flows has offered to discount the lottery winnings at a rate of 8% and pay you cash today in exchange for your future lottery winnings.Since you have studied finance,you insist that they discount the cash flows at 12% instead of 8% because there is some risk as to the certainty of your graduating.If the firm agrees to your demand,then this means they will increase the present value of what they will pay you today.

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Definitions:

Stationery

Writing materials and office supplies, such as paper, envelopes, and writing instruments, used for personal and business correspondence.

Support Product

Ancillary products or services that complement the main product or service offering, enhancing its value or utility.

Industrial Services

Services provided to businesses or industries, such as maintenance, cleaning, consulting, and logistics, rather than individual consumers.

Complementary Products

Goods or services that enhance or are used together with another product, increasing its value or utility.