What is present value of the girls fortune

Assignment Help Financial Management
Reference no: EM13728401

A 5 year girl was given a lottery ticket for her recent birthday. The ticket was the grand prize winner and is suppose to pay $80,000 per year after taxes, for 20 years. The state sued, however, and won the case arguing that it would pay the prize as agreed, but it would not begin payment until the girl reaches age of 18 in exactly 13 years. If the appropriate discount rate is 6% annually, what is present value of the girl’s fortune?

Reference no: EM13728401

Questions Cloud

Which alternative is better deal : Suppose you are going to buy a car. The cost of car is $24,000. You have $10,000 for down payment. You can borrow the balance of $14,000 from dealership’s finance company at 3% APR, with monthly payment for 36 months or you can borrow from a bank wit..
Hobbit manufacturing-increase in total market value for firm : Operating income (EBIT) $600 million, Interest expense $0, Tax rate 35%, Debt $0, Cost of equity 7%, WACC 7%. The company has no growth opportunities (g = 0), so the company pays out all of its earnings as dividends. Hobbit can borrow money at a pre-..
External factors affect the four functions of management : Explain how internal and external factors affect the four functions of management. Explain how the following internal and external factors affect the four functions of management, and includes specific examples for each:
Presentation for board of directors about organization : Imagine you are an executive for BP, JP Morgan or, GoldMan Sacs, and you are preparing a presentation for the board of directors about the organization's direction.
What is present value of the girls fortune : A 5 year girl was given a lottery ticket for her recent birthday. The ticket was the grand prize winner and is suppose to pay $80,000 per year after taxes, for 20 years. The state sued, however, and won the case arguing that it would pay the prize as..
Write a paper over the gangster disciples street gang : Write a paper over the Gangster Disciples street gang - The nature and extent of the group's influence and market.
Strategic human resources management : Strategic human resources management aligns human resource practices with the strategic objectives of an organization. Successful health care managers need to understand how human resource functions can be utilized to fulfill their organization's ..
Discuss how marketers could advertise the new facilities : Besides concierge medicine and retail clinics, identify two other contemporary healthcare facilities identified in the literature. Discuss how marketers could advertise the new facilities and the impact you think the new facilities will have on he..
Do you think heming's testimony is credible : Heming's was interviewed in Ohio nearly a half century after Jefferson's death in Virginia. Do you think his testimony is credible? Why or why not?

Reviews

Write a Review

Financial Management Questions & Answers

  Current bonds have an annual coupon rate

Porter bonds were issued five years ago with a 20 year maturity. The bond has a call provision that allows them to pay off the debt anytime after ten years by compensating bond holders with an extra year’s interest at the coupon rate. The bond’s coup..

  Prepare a business plan

Prepare a business plan that would be useful for launching your product and obtaining financial and managerial support from potential backers.

  Total material cost and the total manufacturing cost

You have been asked to estimate the cost of 100 prefabricated structures to be sold to a local school district. Each structure provides 1,000 square feet of flow space, with 8-feet ceilings. In 2003, you produced 70 similar structures consisting of t..

  Examples of a financial merger and an operating merger

Explain the difference between and give examples of a financial merger and an operating merger and explain the difference and offer an example of each - a joint venture and a merger.

  What is the value of the fund today

Your brother, who is 6 years old, just received a trust fund that will be worth $24,000 when he is 21 years old. If the fund earns 0.10 interest compounded annually, what is the value of the fund today?

  Estimate the current value of the stock

Bruce Jenner is the portfolio manager of a Los Angeles-based equity fund. He is analyzing the value of TJX, Inc. (NASDAQ Stock Exchange: TJX). TJX is a leading retailer of women’s clothing in the US. Jenner has concluded that the DDM is appropriate t..

  Increase its ratio of total debt-total assets

If a company decides to increase its ratio of total debt / total assets from 30% to 50% as a means of increasing its return on equity (ROE), and it is able to maintain a 4.5% return on assets(ROA), what will be the new return on equity (ROE) after it..

  What is the inventory period

Garnishes, Inc. has sales for the year of $46,300 and cost of goods sold of $21,700. The firm carries an average inventory of $4,800 and has an average accounts payable balance of $4,400. What is the inventory period?

  Acc310 due next week mondayplease include references and

due next week mondayplease include references and citations where need

  What is the stock price for each company

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.30 next year. The growth rate in dividends for all three companies is 5 percent. The required return for each company’s stock is 7 percent, 10 percent, and 13 percent, respectiv..

  Calculate a value in response

Calculate a value in response to the following: Believing that an estimated increase in sales is overly optimistic, a company director is requesting data predicting annual profit if the selling price calculated above is adopted but the change in s..

  Find at least two articles from the proquest database that

find at least two articles from the proquest database that highlight and discuss two of the biggest challenges facing

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd