Purchase Solution

Present value of cash flows of two options

Not what you're looking for?

Ask Custom Question

10. You decided to play the lottery and (congratulations!) you were the only winner of a jackpot valued at $50,000,000. You contact the lottery and they make you the following offer: $25,000,000 today in a lump sum or $2.5 million a year for the next 20 years paid annually at the end of each year. Assume you can get 10% return on your investments and that no taxes will be taken out. What is the PRESENT VALUE of each option (not Future Value)?

Purchase this Solution

Solution Summary

The Present value of cash flows of two options is calculated to see which is better

Solution Preview

Option 1= $25,000,000 today

Present value= $25,000,000

Option 2

$2.5 million a year for the next 20 years paid annually at the end of each year.
...

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.

Motivation

This tests some key elements of major motivation theories.

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

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking