Suppose you have a winning lottery ticket and you are given

Assignment Help Accounting Basics

Reference no: EM13574880

1.If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is

A) $4,198.

B) $4,717.

C) $4,333.

D) $4,700

2.Which of the following discount rates will produce the smallest present value?

A) 4%

B) 8%

C) 9%

D) 10%

3.Suppose you have a winning lottery ticket and you are given the option of accepting $5,000,000 three years from now or taking the present value of the $5,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is

A) $4,198,100.

B) $4,319,200.

C) $4,450.

D) $5,000,000.

Reference no: EM13574880

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