1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Citrus2011 [14]
4 years ago
13

You win a scratch off lottery ticket that promises to pay an initial payment of 10,000 next year and grow at a rate of 2% foreve

r. If the discount rate is 5%, what is the present value of the lottery ticket?
Business
1 answer:
Jlenok [28]4 years ago
7 0

Answer:

PW=\frac{10,000}{0.05-0.02}\\ PW=\$333,333.333

Present value of lottery= $333,333.333

Explanation:

Given Data:

Initial Payment=$10,000

Rate at which payment grow=2%=0.02

Discount Rate=5%=0.05

Required:

Present value of lottery=?

Solution:

PW=\frac{Initial\ Payment}{r-g}

where:

r is the discount rate

g is the growth rate

PW=\frac{10,000}{0.05-0.02}\\ PW=\$333,333.333

Present value of lottery= $333,333.333

You might be interested in
Please help!
romanna [79]

Answer:

The answers are permanent part-time, fixed-term and on-call work.

Hope this helps?

4 0
3 years ago
Read 2 more answers
Name the form of ownership represented by SABC
BartSMP [9]

Answer:

Government of South Africa

Explanation:

7 0
3 years ago
The interest rate that should be used when evaluating a capital investment project is sometimes called the ______________. i. in
OlgaM077 [116]

The interest rate that should be used when evaluating a capital investment project is sometimes called the appropriate discount rate and cost of capital.

The cost of capital refers to the minimum rate of return needed from an investment to make it worthwhile, whereas the discount rate is the rate used to discount the future cash flows from an investment to the present value to determine if an investment will be profitable. Appropriate Discount Rate means, at any time, the real (i.e., not inflation adjusted) weighted average cost of capital (after taxes payable by the concession business).

Cost of Capital = (Risk-Free Rate of Return + Credit Spread) × (1 – Tax Rate)

To know more about cost of capital here

brainly.com/question/16031467

#SPJ4

3 0
2 years ago
What are the four factors underlying the free enterprise system?
enyata [817]

Answer:

profit,risk,competition and productivity

3 0
3 years ago
What is the difference between negotiation and debate​
ratelena [41]

Answer:

A negotiation is usually over goods, salary, where you want to go on vacation and is aimed to come to a compromise or agreement.

A debate, is a formal discussion about the pros and cons of a certain topic where opposing views are expressed.

Explanation:

4 0
4 years ago
Other questions:
  • Knowing she has sold 5,000 pairs, assume the company wants to launch a Black Friday promotion, where she would discount her shoe
    15·1 answer
  • Use this formula to help solve the problem. gross income = total of all incomes added together Given the following information w
    9·1 answer
  • When joe's coffee nook raised the price of a latte, joe noticed a substantial change in his daily latte sales. a price reduction
    14·1 answer
  • Dothan Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 12% return, and a 25% chance of prod
    14·1 answer
  • PLEASE HELP! you get 20 points
    7·1 answer
  • Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free ap
    6·1 answer
  • Annual Percentage Rate (APR), credit limit, and penalties and fees are important to consider when _____.
    13·1 answer
  • A decrease in supply while holding demand constant results in a(n) ______ in equilibrium price, and a(n) ______ in equilibrium q
    13·1 answer
  • BKK Corporation sells headphones with a unit selling price of $200 and a contribution margin ratio of 40%. Unit variable costs a
    13·1 answer
  • Under corporate law, a corporation must have a ___________ elected by the shareholders.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!