Purchase Solution

Actual Present Value

Not what you're looking for?

Ask Custom Question

If you did win $12 million in the New York lotto and you will be paid over a 20-year period- $600,000 a year- or you can get a lump sum payment up front. What is the actual present value of this $12 million? Interest rate is 5%.

Purchase this Solution
Solution Summary

The Solution provides the correct option that should be chosen.

Solution Preview

(i) Lumpsum Option Present Value = $12 million

(ii) Annuity Option Present ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Accounting Multiple Choice

    Proposal Y, because its net present value is $22,670 higher than the net present value of Proposal X. d. None of the above.

  • Break-Even Point, Internal Rate of Return, Net Present Value and Capital Budgeting

    The machine's net present value is: a. $1,556. b. ($35). C. $11,000. d. $8,000. 47. If the labor efficiency variance is unfavorable, then: a. actual hours exceeded standard hours allowed for the actual output.

  • NPV: Blossoms Inc

    If the actual cost of the new refrigerator ends up being greater than $36,000, the net present value will become negative. B. If the actual cost of the new refrigerator ends up being less than $36,000, the net present value will become negative.

  • Measurement methods and metrics

    In Net Present Value analysis, analysts convert future values of benefits to their present-value equivalents by discounting them at the organization's cost of funds.

  • Using Earned Value to Determine Status

    A B SPI Earned value (EV) ÷ Present value (PV) 0.3 0.3 Earned Value (EV) Present Value (PV) $360 $1200 $360 $1200 Exhibit 6 - Cost Performance Index (CPI) Formula Task A B CPI Earned value (EV) ÷ Actual cost

  • Performance Evaluation Purposes

    If Suture has a 5-year investment project that has a project profitability index of zero, this means that: 1 the net present value of the project is equal to zero. 2 the internal rate of return of the project is equal to the discount

  • Calculating the Intrinsic Value of a Bond

    Value of bond = present value of cash inflows=$533.39 Use PV function in MS Excel, See into the cell for values.

  • Lowry Co. Bond Issue Price and Amortization Table

    Table values are: Present value of 1 for 10 periods at 10% .386 Present value of 1 for 10 periods at 12% .322 Present value of 1 for 20 periods at 5% .377 Present value of 1 for 20 periods at 6% .312 Present value of annuity for 10 periods

  • Multiple choice accounting questions

    Is computed as the present value of all remaining future payments, discounted using the market rate of interest at the time of issuance. D.

View More Related Solutions