User Account

All Pages

Which payout option should alex select

Assignment Help Financial Management
Reference no: EM132318513

Question

Alex Kelton recently won the jackpot in the Colorado lottery while he was visiting his parents. When he arrived at the lottery office to collect his winnings, he was offered the following three payout options:

Receive $100,000,000 in cash today.

Receive $25,000,000 today and $9,000,000 per year for eight years, with the first payment being received one year from today.

Receive $15,000,000 per year for 10 years, with the first payment being received one year from today.

Assuming that the effective rate of interest is 7%, which payout option should Alex select?

Reference no: EM132318513

Questions Cloud

What is lupes agi after taking into consideration : The rest of the year, the chalet was used by them and their friends and family. What is the proper tax treatment of the $8,000?
What amount of net income from the duplex should stephen : How much, in rental losses, can an individual earning a salary of $125,000 per year offset against salary if he or she owns at least 10% of a rental.
What is the proper tax treatment of the income : The rest of the year, the chalet was used by them and their friends and family. What is the proper tax treatment of the $6,000 income?
What is the advantage of testing property : Property and its related accounts is a good example of work that can easily be shifted. Clients may make acquisitions at varying times through the year.
Which payout option should alex select : Receive $25,000,000 today and $9,000,000 per year for eight years, with the first payment being received one year from today.
Is hedge and forward contracts the same : Is hedge and forward contracts the same? How do u deal with forward contracts using hedge accounting under aspe?
Determine the amount of depreciation expense for the fifth : A company purchases equipment for $62,500 on January 1. It has an estimed residual value of $2,800 and an estimated useful life of 5 years.
How much is the annual amortization expense for 2019 : On that date, the patent had a remaining legal life of 13 years. Adelphi Company expects to use the patent for 6 years after which time it will be worthless.
How much should be recorded as goodwill for this transaction : Annapolis Company was recently sold for $450,000. Annapolis had assets & liabilities appraised at the time of the sale in the amounts of.

Reviews

Write a Review

Financial Management Questions & Answers

  Zero coupon risk-free discount bonds

Three zero coupon risk-free discount bonds of one, two and three year term to maturity are selling for, respectively, $950, $890 and $800.

  Calculate the npv for the headache and arthritis product

Calculate the NPV for the Headache-Only product. Calculate the NPV for the Headache and Arthritis Product

  How much will each annual payment be

You need to accumulate $96,959 for your son's education. How much will each annual payment be?

  Purposes of market regulation-tools of monetary policy

Purposes of market regulation, Tools of monetary policy, Goal of the U.S. Federal Reserve System.

  Correct method of calculation for the interest accrued

Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?

  What steps are involved in settling a purchase made

Why do you think the spread between buy and sell rates used in credit card payments is smaller than those applying to foreign banknotes?

  Pledges to increase its dividend

Metroplex Corporation will pay a $5.10 per share dividend next year. The company pledges to increase its dividend by 4.00 percent per year indefinitely. If you require a 9.00 percent return on your investment, how much will you pay for the company's ..

  Portfolio consists of securities

A portfolio consists of Securities A and B in the proportions of 0.7 and 0.3. Security A has a random error standard deviation of 7%; Security B at 11%. The portfolio beta is 1.2, and the market standard deviation is 10%.

  Water management infrastructure by installing new pipes

A city plans to upgrade its storm water management infrastructure by installing new pipes. what is the capitalized worth of the project.

  Calculate market-value weights for each source of capital

Calculate the book-value weights for each source of capital. Calculate the market-value weights for each source of capital.

  What was the company price/earnings ratio

What was the company's price/earnings ratio?

  Company disbursement float-collection float and net float

Calculate the company’s disbursement float, collection float, and net float.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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