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Ksju [112]
3 years ago
8

You have just received notification that you have won the $3 million first prize in the Centennial Lottery. However, the prize w

ill be awarded on your 100th birthday (assuming you’re around to collect), 66 years from now.
What is the present value of your windfall if the appropriate discount rate is 10 percent?

PV = $__________________________
Business
1 answer:
son4ous [18]3 years ago
8 0

Answer:

The present value of your windfall if the appropriate discount rate is 10 percent is $5,562

Explanation:

Amount of Prize = $3,000,000

number of year = 66 years

Discount Rate = 10%

use following formula to calculate the Present value of Lottery prize

Present Value = Future value / ( 1 + discount rate )^number of years

PV = FV / ( 1 + r )^n

PV = $3,000,000 / ( 1 + 0.10 )^66

PV = $3,000,000 x ( 1 + 0.10 )^-66

PV = $3,000,000 x ( 1.10 )^-66

PV = $5,561.65

PV = $5,562

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5 0
3 years ago
If the economy is normal, Charleston Freight stock is expected to return 16.5%. If the economy falls into a recession, the stock
Vinil7 [7]

Answer:

The Mean return = 0.8*16.5% + 0.2*-11.6%

The Mean return = 0.132 + (-0.0232)

The Mean return = 0.132 - 0.0232

The Mean return = 0.1088

The Mean return = 10.88%

Variance = 0.8*(16.5%-10.88%)^2 + 0.2*(-11.6%-10.88%)^2

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6 0
2 years ago
After World War II, cigarettes were used as money in Germany. This is an example of:________.
Paladinen [302]

Answer: Commodity Money

Explanation:

Commodity money is used to describe goods that have an intrinsic value that enable them to be used as a medium of exchange for goods and services. For a good to be used as commodity money, it should be rare and easily exchangeable.

Examples of goods that have been and can be used as commodity money include gold, silver, alcohol and cigarettes with cigarettes being especially popular in prison.

7 0
3 years ago
XZYY, Inc. currently has an issue of bonds outstanding that will mature in 16 years. The bonds have a face value of $1,000 and a
borishaifa [10]

Answer: 10.66%

Explanation:

The expected quoted annual rate of return when the bonds are bought and being held until maturity will be calculated thus:

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The Yield to Maturity formula will be:

= Rate(maturity period, coupon payment, -price, fave value)

= Rate(16, 130, -1176, 1000)

Yield to Maturity = 10.66%

Therefore, the expected quoted annual rate of return is 10.66%.

5 0
2 years ago
A market that consists of all possible consumers regardless of their specific needs or wants is a
Alborosie

A market that consists of all possible consumers regardless of their specific needs or wants is a <u>"mass market".</u>


The term mass market refers to an overall public market which is comprising of purchasers having a place with different age groups, ways of life and preferences. On the off chance that an organization makes any product or item which is valuable to different purchasers across different areas then it is said to have a mass market request. Items or Products concentrating on a specific statistic frequently have an excessive number of limitations and are restricted by specific limits; such items makes ‘segment market.’

6 0
3 years ago
Read 2 more answers
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