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user100 [1]
3 years ago
13

9. Assume that you just won $35 million in the Florida lottery, and hence the state will pay you 20 annual payments of $1.75 mil

lion each beginning immediately. If the rate of return on securities of similar risk to the lottery earning (e.g, the rate on 20 year US Treasury bonds) is 6 percent, what is the present value of your winning
Business
1 answer:
Morgarella [4.7K]3 years ago
8 0

Answer:

$11.47 million

Explanation:

The present value of an annuity is determined by:

PV = P*[\frac{1-(1+r)^{-n}}{r}]

With annual payments (P) of $1.75 million, for a period (n) of 20 years at a discount rate (r) of 6 percent, the present value is:

<u />PV = 1.75*[\frac{1-(1+0.06)^{-20}}{0.06}]\\PV=\$11.47\ million<u />

The present value of your winning is $11.47 million

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Explanation:

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3 years ago
A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's
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0.1333

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3 years ago
the financial system consists of financial _____, such as commercial banks, and financial markets, such as the stock market.
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The financial system consists of financial intermediaries, such as commercial banks, and financial markets, such as the stock market. This is further explained below.

<h3>What are financial intermediaries?</h3>

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In conclusion, Institutions like commercial banks and marketplaces for trading financial instruments like stocks and bonds make up the financial system.

Read more about financial intermediaries

brainly.com/question/2494552

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5 0
2 years ago
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