A Nonprofit Organization Sells Chances for a $40,000 Automobile at $125

question 29

Multiple Choice

A nonprofit organization sells chances for a $40,000 automobile at $125 per ticket. It sells 2,000 tickets and offers four prizes, summarized in the table that follows. What are the expected winnings (or loss) for each ticket? ​

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Definitions:

Cost Of Capital

A company's calculation of the minimum return necessary to justify the cost of a capital project or investment.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of its assets and earnings.

Target Capital Structure

The optimal mix of debt, equity, and other securities that a firm aims to maintain for funding its operations.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders, often used for reinvestment.