Explain the differences showing appropriate calculations

Assignment Help Finance Basics
Reference no: EM13285839

You just won the state lottery - $10 Million! You have the option of either taking a lump sum in 30 years, or taking it all today if discounted by a 10 percent interest rate. There is also the option of taking an annuity, which would be one equal payment each year for 30 years. Explain the differences showing appropriate calculations. Do not consider taxes at this time. Include your opinions.

Reference no: EM13285839

Questions Cloud

Explain relation in the atomic numbers and the ionic radius : What is the relationship between the atomic numbers and the ionic radius of the elements in a group.
What is the cost per kwh to operate the radio : A transistor radio operates by means of a 12 V battery that supplies it with 56 mA current. what is the cost per kWh to operate the radio in this manner
Give the range of memory addresses with the memory chip : Suppose a 3:8 decoder is attached to an array of 8Kx8 memory chips, the low 13 bits of the address access the locations within each memory chip, and the most significant 3 bits of the address are tied to the select inputs of the decoder (A15 is MS..
What is the present value of a five-year lease arrangement : What is the present value of a five-year lease arrangement with an interest rate of 9% that requires annual payments of $10,000 per year with the first payment being due now?
Explain the differences showing appropriate calculations : There is also the option of taking an annuity, which would be one equal payment each year for 30 years. Explain the differences showing appropriate calculations. Do not consider taxes at this time. Include your opinions.
Find the coefficient of friction between book and floor : You give a 2.35 kg book an initial shove at 2.50 m/s, Find the coefficient of friction between book and floor
How do you reconcile high payouts and large-scale issuance : Around the world, utilities generally have the highest dividend payouts of any industry, yet they also tend to have massive investment programs to finance through external funding. How do you reconcile high payouts and large-scale issuance?
What would happen to the price of the bonds over time : Suppose Hillard Manufacturing sold an issue of bonds with a 10-year maturity, a $1,000 par value, a 10 percent coupon rate, and semiannual interest payments.
What is the magnitude of the passengers acceleration : A Ferris wheel with radius 14.0m is turning about a horizontal axis through its center. What is the magnitude of the passenger's acceleration as she passes through the lowest point in her circular motion

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute component cost of debt

Rollins Company has a target capital structure consisting of 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Suppose the firm has insufficient retained earnings to fund the equity portion of its capital budget.

  What ways does a designer suit differ

One of the more successful strategies in retailing has been the development of "designer label" lines of apparel. In what ways does a designer suit differ from its equivalent purchased from a discount chain? Is this the result of advertising, qual..

  What sales volume would be required to break even

The sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $7.50; and fixed costs are estimated at $120,0000. What sales volume would be required to break even, i.e., to have EBIT = zero?

  What is the expected value of the rate of return

The most likely (with probability 80%) value is 5 years. Assume the heat exchanger has no salvage value at the end of its useful life.

  Calculating nominal cash flow

Etonic Inc. is considering an investment of $365,000 in an asset with an economic life of 5 years. The company estimates that the nominal yearly cash revenues and expenses at the end of the 1st year will be $245,000

  Difference between the book value and market value

We discussed cash flow in DQ1. Another measure of value is the firm's assets less liabilities or investor's equity. We call this book value of the company.

  Compute effective annual interest rate

A bank offers your Corporation a revolving credit arrangement for up to $60 million at an interest rate of 1.52% per quarter. The bank also needs you to maintain a compensating balance of 6% against the unused portion of credit line.

  Computation of current yield of a bond

Computation of current yield of a bond and They have a 6-year maturity, an annual coupon of $85

  What is the required asset turnover for a firm

What is the required Asset turnover for a firm with 10% profit margin, 75% equity, and 60% dividend payout that wishes to grow 8% without increasing financial leverage?

  Compute simple regular payback

Company planning of project up front paid today at t = o .The project will generate positive cash flow of $60,000 for the next 5years.The project NPV is $75,000 and company WACC is 10 percent.

  How much additional money will be in the account

A self-employed person deposits $3,000 annually in a retirement account (called a Keogh account) that earns 8 percent.

  Future of financial accounting

I think the IFRSs are going to cause a big change in the way accounting is approached worldwide. We will finally have a set of universal accounting standards that will be used by companies all over the globe.

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