Purchase Solution

Net Present Value & Rate of Return for a winning Powerball lottery ticket

Not what you're looking for?

Ask Custom Question

Please see attached file for further detail.

Question 2 - Net Present Value

You have just paid $20 million in the secondary market for the winning Powerball lottery ticket. The prize is $2 million at the end of each year for the next 25 years. If your required rate of return is 8 percent, what is the net present value (NPV) of the deal?

Internal Rate of Return

What is the internal rate of return (IRR) of the Powerball deal in question 2?

Modified Internal Rate of Return

What is the modified internal rate of return (MIRR) of the Powerball deal in question 2?

Expected Rate of Return of Corporate Bond

Assume that Intel Corporations $1,000 face value 9 percent coupon rate bond matures in 10 years and sells for $1,100. If you purchase the bond for $1,100 and hold it to maturity, what will be your average annual rate of return on the investment?

Attachments
Purchase this Solution
Solution Summary

The net present value and rate of return for a winning powerball lottery ticket is determined. The internal rate of return is determined.

Purchase this Solution
Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

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.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Situational Leadership

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

View More Free Quizzes
Related BrainMass Solutions

  • Statistics : Probability of Winning a Powerball Lottery

    45925 Statistics : Probability of Winning a Powerball Lottery The Powerball For a single ticket, a player first selects five numbers from the numbers 1-53 and then chooses a powerball number, which can be any number between 1 and 42.

  • Stocks, Equity and Rate of Return

    If your required rate of return is 8%, what is the net present value (NPV)of the deal? 6.) What is the internal rate of return (IRR) of the Powerball deal in question 5? 7.)

  • Flotation Cost and Retained Earnings

    You have just paid $20 million in the secondary market for the winning Powerball lottery ticket, The prize is $2 million at the end of each year for the next 25 years.

  • Probability using counting rules

    To play powerball a participant must purchase a ticket for $1 and then select five numbers from the digits 1 through 55 and a powerball number from the digits 1 through 42.

  • Combinations - Winning at Powerball

    The cost of a single ticket (one number combination) is $1. Suppose that a very wealthy person decides to buy tickets for every possible number combination to be assured of winning a $150 million grand prize.

  • Powerball lottery probabilities

    -Why is the probability for matching only the red ball is 1/69? (assuming only one ticket is purchased). -Assume the overall probability of winning a prize is 1/37. How would you determine this?

  • Equivalent lump-sum payment for Shelley's winning lottery

    Solution explains the computation of equivalent lump-sum payment for Shelley's winning lottery ticket

  • Powerball Winning Combinations, Prizes, and Probabilities

    Prizes are also given for matching some but not all the balls drawn. 3. Click Table of Powerball Winning Combinations, Prizes, and Probabilities (or see p. 231 in the textbook) for data about Powerball and probabilities of winning.

  • Statistics: Lottery and Decisions

    If the expected value of return was .79, then that means that for every 10 $1 lottery tickets bought, people would receive, on average, $7.90 and the lottery would receive $2.10.

View More Related Solutions