Use the Following to Answer Questions

question 1

Multiple Choice

Use the following to answer questions
Present and future value tables of $1 at 3% are presented below:

-Shelley wants to cash in her winning lottery ticket.She can either receive ten $100,000 semiannual payments starting today,or she can receive a lump-sum payment now based on a 6% annual interest rate.What is the equivalent lump-sum payment?

• A)$853,020.
• B)$801,969.
• C)$744,090.
• D)$878,611.

---

Definitions:

Residual View

In corporate finance, this concept suggests that dividends should be paid from the residual or remaining equity after all project investments with positive NPV have been funded.

Dividends

Payments made by a corporation to its shareholder members, representing a portion of the corporate profits.

Transaction Costs

Expenses incurred when buying or selling securities, including broker fees, commissions, and other charges.

Tailoring

The process of making or adapting something, especially clothing, to meet specific requirements or fit particular measurements.