Purchase Solution

Lottery Payout - Time Value of Money

Not what you're looking for?

Ask Custom Question

If you were to win $1,000,000 in the state lottery and had a choice to either receive $50,000 a year for 20 years or $560,000 now, which would you choose and why? What factors would you need to consider?

Purchase this Solution
Solution Summary

Factors to consider when deciding method of lottery payout. Workings attached as Excel.

Solution provided by:
Radhika Lakshmi, MPhil
Education
  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
Recent Feedback
  • "Great explanations on how the answers were obtained."
  • "Love the way she explains everything step by step."
  • "Solutions were thoroughly explained."
  • "Excellent explanations of how problems are solved"
  • "Thanks"
Purchase this Solution
Free BrainMass Quizzes
MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

View More Free Quizzes
Related BrainMass Solutions

  • Discrete Probabilty Distributions for Lottery Payouts

    The standard deviation is simply the square root of the value that you get for V. This analysis shows that one expects to lose money by playing the lottery.

  • Lottery Winnings : How do you get the most money

    216619 Lottery Wiinings : How do you get the most money? You just won the lottery for 1 million payable in annual installments of 200,000.00 with the first payment made in 1 year. Alternative, you could accept 850,000.00 today.

  • Present and Future Values of Annuities

    First, it illustrates how to evaluate alternative payout options by computing the present values of several annuities and comparing those to a lump-sum. It then illustrates how to compute the future value of an annuity.

  • Calculating Present Values of future cash flows.

    further in time the money is received the lower is its present value The relationship between present value and time is not linear; therefore, the value is not halved

  • demand and supply equations

    (Payout Scheme X has the greater present value., Payout Scheme Y has the greater present value. Or Payout Scheme X and Payout Scheme Y have equal present value.) Years after your lottery win, a friend in another country calls to ask your advice.

  • Present Value Analysis

    156997 Present Value Analysis Lottery Payout You recently won the lottery and you were given the followin goptions for your payout of $1 million dollars.

  • Capital budgeting: Multimedia Technology, Jackson City Parks

    545078 Capital budgeting: Multimedia Technology, Jackson City Parks P11d Using the time value of money to compute the present and future values of single lump sums and annuities. Congratulations! You have won a state lottery.

  • lottery winner

    Which is the better choice only considering the time value of money - not your current personal need. Separate answers for present value and future value.

  • Time Value and Money Description

    217381 Time Value and Money Description From any general internet source provide a brief description of an example that illustrates the use of the time value of money. Please cite and reference the source.

View More Related Solutions