You Win the Lottery and Must Decide How to Take

question 21

Multiple Choice

You win the lottery and must decide how to take the payout. Use a 10% discount rate. What is the present value of $14,000 a year received at the end of each of the next five years? Present Value of $1
Present Value of Annuity of $1

• A)$8694
• B)$70,000
• C)$108,108
• D)$53,074

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Definitions:

Celebrity Advertising

A marketing strategy that uses the fame of a celebrity to promote products or services, leveraging their influence to reach potential customers.

Expensive Substitutes

Expensive substitutes are alternative products or services that are more costly than the original item they replace, often affecting consumer choices.

Brand Names

Labels that distinguish the goods or services of one seller from another seller.

Generic Items

Products that are marketed without a brand name and are typically lower in price than branded equivalents.