You Win the Lottery and Must Decide How to Take

question 57

Essay

You win the lottery and must decide how to take the payout.Use an 8% discount rate for all parts of this question.
Required
A)What is the present value of $10,000 a year received at the end of each of the next six years?
B)What is the present value of taking a $50,000 lump sum now?
C)What is the present value of a $85,000 lump sum taken in 7 years?

• A)What is the present value of $10,000 a year received at the end of each of the next six years?
• B)What is the present value of taking a $50,000 lump sum now?
• C)What is the present value of a $85,000 lump sum taken in 7 years?

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Definitions:

Italy

A country in Southern Europe known for its rich history, culture, and contributions to art, science, fashion, and cuisine.

Art Books

Publications that specifically focus on the visual arts, including but not limited to collections of art works, histories, and critical analyses.

Italy

A European country known for its rich history, culture, and contributions to art, science, fashion, and cuisine, shaped by a long Mediterranean coastline and distinguished cities.

Comparative Advantage

A concept in economics that refers to the ability of a party to produce a particular good or service at a lower opportunity cost than others.