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anygoal [31]
4 years ago
11

A lottery claims its grand prize is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immedi

ately, what is this grand prize really worth? Use an interest rate of 6%. Show work
Business
1 answer:
Ronch [10]4 years ago
7 0

Answer:

Answer is $6,079,058.25

Explanation:

This is a simple present value problem.

Present value of annuity shows the worth of annual payments which is present.

As per the given statement, grand prize of lottery is $10 million. This is payable over 20 years at $500,000 per year. The interest rate is 6%.

To find the real worth of the grand prize, each $5 million payment must be "brought back" to their current value at a 6% per year rate.

N = 20; PMT = 500,000; FV = 0 ; I = 6% ; Payments in BEGIN mode.

PV= Cash flow/ (1+rate of return) to the power n

PV will be addedc exponential power 20 times giving answer as $6,079,058.25

Hence, PV = $6,079,058.25

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C, tv commercials are ussualy the most expensive.

If that helps make sure to mark this as the brainliest!
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7 0
3 years ago
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Ben, a product manager at SunRise Juice Co., is having a hard time choosing the wording for a new ready-made fruit smoothie prod
nikdorinn [45]

Answer:

  • I think Ben should encourage the Senior Management to call a multidisciplynary meeting and do some research.

Explanation:

<em>I think Ben is right</em>. Even though the statement is technically correct, it may mislead customers.

Customers may interpret the phrase "<em>no sugar added</em>" as if the product did not contain any sugar.

Thus, customers interested in drinking beverages without sugar at all might think  they are "safe" consuming the smoothie beverage, when in reallity each <em>smoothie's bottle contains sugar 35 g of naturally occurring sugars from the fruit.</em>

Customers deserve to be certain on what they are buying, thus the labels must be a sincere help for them, and not ambiguos at all.

This is a "gray zone" and an example of what in ethics is called a dilema.

I think the decision should be shared by a wider team and based on some research.

I think Ben should encourage the Senior Management to call a multidisciplynary meeting, where the subject is widely discussed. Also, I would suggest Ben to do some research, look for precedents about labeling  in the industry, and try to learn the opinion of the FDA about this sensitive matter.

6 0
3 years ago
Ambiguity can arise as to whether receivables have been sold or instead are being used as collateral for a loan whenever certain
victus00 [196]

Answer:

is whether the transferor surrenders control over the receivables

Explanation:

In Sales of Receivables and Collateralized Borrowing,.companies do not want to wait for payments to arrive as they simply quickens cash collection with help of bank or financing company and also factoring and collateralized borrowings are various means to speed up cash collections. In Collateralized borrowing, receivables are simply collateral. Company gets cash from bank and is saddle with the responsibility for repaying loan.

Issues regarding collateralized borrowing are the sales of receivables had the purchaser is called a factor, borrowing using receivables as collateral and accounts receivable is not wipe off from seller's books.

6 0
3 years ago
Identify the role the government regulation serve in business.
castortr0y [4]
<span>The U.S. government has set many business regulations in place to protect employees' rights, protect the environment and hold corporations accountable for the amount of power they have in this business-driven society.</span>
8 0
3 years ago
David’s friend, Keanu, has hired a financial planner for advice on retirement. Considering Keanu’s current expenses and expected
tatiyna

Answer:

28.85

Explanation

Keanu has decided to save a fixed amount of 70,000 for a given period. We would need to calculate the number of years to achieve 7,796,223 using the FVIFA formula (Future value interest for an annuity)

Fixed payment× FVIFA=Future value

<em>FVIFA</em> = \frac{(1+r)^{n} - 1}{r}

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and n is the number of periods

therefore; 70000×\frac{(1+0.09)^{n} - 1}{0.09}=7796223

{(1+0.09)^{n} }=(7796223×0.09)/70000

n=27.85

However, since Keanu will not invest until the end of the first year, he will spend 28.85 years to achieve his goal

7 0
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