What is this grand prize really worth

Assignment Help Business Economics

Reference no: EM131197626

A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%. Need to show formulas in excel.

Reference no: EM131197626

Questions Cloud

Using put-call parity relation-solve for value of equity : When we derived the put-call parity relationship (for non-dividend paying stocks), we showed that the put was equivalent to a combination of the call, the stock and riskless borrowing/lending. Using the put-call parity relation, solve for the value o..

What is the return on stockholders equity : Calculating and Using Ratios 1. If we divide users of ratios into short-term lenders, long-term lenders, and stockholders, which ratios would each group be most interested in, and for what reasons? What is the return on assets? What is the return on ..

Design risky portfolio based on two stocks : An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 15% and a standard deviation of return of 29%. Stock B has an expected return of 10% and a standard deviation of return of 14%. The correlation c..

Write the capstone business plan : How to create a business plan for a public company like Wal-Mart, Delta, Pepsi, Disney, Coca-Cola Etc. In one Word document, you will submit a 1 page proposal on each topic stating rationale and why it is a relevant topic on which to write the capsto..

What is this grand prize really worth : A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%. Need to show formulas in excel.

Provided for retirement income : Mr. Jones intends to retire in 20 years at the age of 65. As yet he has not provided for retirement income, and he wants to set up a periodic savings plan to do this. If he makes equal annual payments into a savings account that pays 4% interest per ..

Golden opportunity-what is the irr for the gold mine : The Utah Mining Corporation is set to open a gold mine near Provo, Utah. According to the treasurer, Monty Goldstein, “This is a golden opportunity.” The mine will cost $3,600,000 to open and will have an economic life of 11 years. What is the IRR fo..

Retirement fund-what is the required semiannual payment : Suppose that you are the manager of a newly formed retirement fund. You are to set up a series of semiannual payments to accumulate a sum of $1,000,000 in ten years. You assume that the appropriate interest rate for the period is 6 percent annual, co..

Equivalence for repeated cash flows : A student is buying a new car. The car’s price is $19,500, the sales tax is 8%, and the title, license, and registration is $650 to be paid in cash. Instead of buying the car now, the student has decided to save money in equal monthly amounts for 48 ..

User Account

All Pages