Lottery-annuity or lump sum

Assignment Help Finance Basics
Reference no: EM1330788

Assume you won the lottery for $7M. You have the following two choices in how you want to receive your prize:

1. $350,000 each year for the next 20 years, with the first check received today

2. One lump sum of $4M in cash today.

Which is the better option?

Reference no: EM1330788

Questions Cloud

How it relates to nonprofit financial management : HR and NPO Financial Management - What your thoughts are to these fundamental questions in your own experiences and how it relates to nonprofit financial management?
The relationship between bioethics and absolute liability : Explain The relationship between bioethics and absolute liability
Investment to create comprehensive risk management program : Commit a significant investment to creating and implementing a comprehensive risk management program.
Why x3d is currently replacing vrml : X3D is currently replacing VRML as the nearest the internet gets to Virtual Reality currently. Is X3D suited specifically to certain applications over others? consider an application for the Internet where you believe Virtual Reality would be of b..
Lottery-annuity or lump sum : Assume you won the lottery for $7M. You have the following two choices in how you want to receive your prize: Which is the better option?
Perspectives of human resources management : Perspectives of Human Resources Management - Explain and discuss the operator, manager, executive, and political perspectives on human resources management.
Illustrate what components would be comprised in spreadsheet : Illustrate what components would be comprised in the spreadsheet. Explain how could you perform sensitivity analysis on the spread sheet.
Public relations manipulation : Consider the Whole Foods' CEO case - was it a case of free speech or public relations manipulation?
Explain the human resources model components : Human Resources Model Components - Check the components of the human resources model and how the components interact

Reviews

Write a Review

Finance Basics Questions & Answers

  Future competitive success of southwest airlines

Write down the major factors for the future competitive success of southwest airlines.

  Evaluating initial amount and later balance of loan

An amortized loan has 10 annual payments at the end of each year starting one year from now. The first 5 payments are $1000 each and the final 5 payments are $500 each.

  Computation of cost of equity, rate of return and wacc

Computation of cost of equity, Rate of return and WACC and What is the cost of equity for ABC and What is it for XYZ

  Calculate present value of future payment

Compute the present value of a payment of $1,075 you would received for 10 years if the interest rate is 5%. Compute the present value of a payment of $875 you would received for 15 years if the interest rate is 5%.

  Computing future exchange rate

You are considering a project in Poland which has initial cost of 275,000PLN. The project is expected to return one-time payment of 390,000PLN four years from now.

  Identification of capital and revenue expenditure

Identification of capital and revenue expenditure and A new machine was accidently damaged during installation

  Computation of dividend paid on common stock

Computation of Dividend paid on common stock under non-cumulative & cumulative schemes. Compute the dividends paid to each class of stock in each of those years assuming the preferred stock is non-cumulative. Use the matrix format listed be..

  Relating mutually exclusive projects

Relating Mutually Exclusive Projects and If the company plans to replace the machine

  Computation of net present value with given data

Computation of net present value with given data and What is its net present value

  Computation of the effective interest rate on the loan

Computation of the effective interest rate on the loan payable in due and in advance and calculate Interest is deducted in advance

  Computing the future value of annuity

An employee works at the local hamburger restaurant for 40 years and never earns more than minimum wage-What are your thoughts regarding this sum?

  Value of the firm be if the company takes on debt

What will the value of the firm be if the company takes on debt equal to 100 each cent of its unlevered value?

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