The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1.34 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $67,000 each. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can invest money at a 9% rate of return, what is the present value of his winnings? (Enter your answer in dollars and not in millions of dollars.) Present value
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- You and 11 coworkers just won $1616 million ($1 comma 333 comma 333.331,333,333.33 each) from the state lottery. Assuming you each receive your share over 1717 years and that the state lottery earns a 66 percent return on its funds, what is the present value of your prize before taxes if you request the 'up-front cash' option? Question content area bottom Part 1 Click on the table icon to view the annuity table LOADING... . The present value of your prize before taxes if you request the 'up-front cash' option is $enter your response here. (Round your answer to the nearest dollar.)The top prize for the state lottery is $114,100,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $114,100,000 in 16 equal payments of $7,131,250-one payment today and one payment at the end of each of the next 15 years. If you choose the cash payment, you will receive a one-time lump sum payment of $68,171,032.39. If you can invest the proceeds and earn 9 percent, which you would choose along with the present value of the annuity? (Round factor values to 4 decimal places, e.g. 1.5213 and final answer to 2 decimal places, e.g. 15.25.) Lump sum payment VPLEASE ANSWER ALL THREE QUESTIONS A $2.4 million state lottery pays $10,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 8.7%, compounded monthly? As the contestant with the longest winning streak in the history of Jeopardy, Ken Jennings won more than $2.5 million. Suppose he invested $1.6 million in an ordinary annuity that earned 4.8%, compounded monthly. How much would he receive at the end of each month for the next 15 years? A man buys a house for $340,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 7 years. The interest rate on the debt is 11%, compounded semiannually. Find the total amount paid for the purchase only
- View Policies Show Attempt History Current Attempt in Progress Your answer is partially correct. Morgan Long has just learned he has won a $500,400 prize in the lottery. The lottery has given him two options for receiving the payments. (1) If Morgan takes all the money today, the state and federal governments will deduct taxes at a rate of 48% immediately. (2) Alternatively, the lottery offers Morgan a payout of 20 equal payments of $37,800 with the first payment occurring when Morgan turns in the winning ticket. Morgan will be taxed on each of these payments at a rate of 26%. Click here to view factor tables Compute the present value of the cash flows for lump sum payout. (Round answer to 0 decimal places, e.g. 458,581) Lump sum payout $ Assuming Morgan can earn an 10% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout (Round factor values to 5 decimal places, eg. 1.25124 and final answer to O…The top prize for the state lottery is $115,700,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $115,700,000 in 25 equal payments of $4,628,000—one payment today and one payment at the end of each of the next 24 years. If you choose the cash payment, you will receive a one-time lump sum payment of $53,355,093.34. If you can invest the proceeds and earn 9 percent, which option should you choose? (Round factor values to 3 decimal places, e.g. 1.521.) Lump sum paymentAnnual paymentThe top prize for the state lottery is $105,704,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $105,704,000 in 25 equal payments of $4,228,160—one payment today and one payment at the end of each of the next 24 years. If you choose the cash payment, you will receive a one-time lump sum payment of $57,293,079.68. At what interest rate would you be indifferent between the cash and annual payment options? (Round answer to 0 decimal places, e.g. 15%.) Interest rate %
- Question: Congratulations! You have won a state lottery. The state lottery offers you the following (after- tax) payout options: 1. $14,000,000 after five years 2. $2,000,000 per year for five years 3. $13,000,000 after three years Present value of the payout, Option #1 is $ Round your answer to the nearest dollar.You have just received notification that you have won the $2.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 62 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? Multiple Choice $12,395.81 $3,794.39 $3,949.26 $3,562.08 $3,871.82* The Powerball Lottery, worth $280 million, was won by a single individual. The winner was given two choices: receive 26 payments of $7 million each with the first payment to be made immediately and the rest to be made at the end of each of the next 25 years, or receive a single lump-sum payment now that would be equivalent to the 26 payments of $7 million each. If the state uses an interest rate of 4.5 % per year, calculate the amount of the lump sum payment.
- The top prize for the state lottery is $105,000,000. You have decided it is time for you to take a chance and purchase a ticket. Before you purchase the ticket, you must decide whether to choose the cash option or the annual payment option. If you choose the annual payment option and win, you will receive $105,000,000 in 20 equal payments of $5,250,000—one payment today and one payment at the end of each of the next 19 years. If you choose the cash payment, you will receive a one-time lump sum payment of $63,830,111.58. You can invest the proceeds and earn 7%. At what interest rate would you be indifferent between the cash and annual payment options? (Round factor values to 3 decimal places, e.g. 1.521 and final answer to 0 decimal places, e.g. 15%.)Click here to view the PV Table. Interest rate %P9-11 (Algo) Comparing Options Using Present Value Concepts LO9-7 After hearing a knock at your front door, you are surprised to see the Prize Patrol from your state's online lottery agency. Upon opening your door, you learn you have won the lottery of $15.6 million. You discover that you have three options: (1) you can receive $1.56 million per year for the next 12 years, (2) you can have $13.5 million today, or (3) you can have $4.2 million today and receive $1.10 million for each of the next 10 years. Your lawyer tells you that it is reasonable to expect to earn an annual return of 10 percent on investments. Required: 1. What is the present value of the above options? (FV of $1. PV of $1. FVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. 2. Which option do you prefer? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the present value of the above options? Note: Enter your answers in whole dollar not in…es You have just received notification that you have won the $2 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 63 years from now. What is the present value of your windfall if the appropriate discount rate is 8 percent? Multiple Choice $14,425.18 $15,679.54 $15.993.13 $15,365.95 $40,135.54