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spin [16.1K]
2 years ago
11

Winners of the Georgia Lotto drawing are given the choice of receiving the winning amount divided equally over 2222 years or as

a​ lump-sum cash option amount. The cash option amount is determined by discounting the annual winning payment at 66​% over 2222 years. This week the lottery is worth ​$1919 million to a single winner. What would the cash option payout​ be?
Business
1 answer:
Wewaii [24]2 years ago
5 0

Answer:

0 i.e. zero

Explanation:

The formula we will us to calculate the cash option payout​ for formula for calculating the present value (PV) .

Present value (PV) can simply be described as the current value of a future amount or future stream of cash flows given a certain return rate.

To calculate the PV of a future cash flow, we will discount it by using the discount rate.

The formula is provided as follows:

PV = FV/(1 + r)^n ............................................ (1)

Where,

PV = Present Value = ?

r = discount rate = 66% = 0.66

FV = annual future value = $863,636.36

n = number of years = 2222 years

Note that the annual future value calculated by diving the $1919 million by 2222 years and this give us $863,636.36 (i.e.  1,919,000,000 ÷ 2222 = $863,636.36).

Substituting the figures above into equation (1), we obtain:

PV = 863,636.36/(1 + 0.66)^2222

     = 863,636.36/(1.66)^2222

     = 863,636.36/∞

PV = 0

This is because, the division of any number by infinity is equal to zero. And if we multiply by zero by 2222, it will still give us zero PV.

Therefore, the cash option payout​ will be zero. It is better the winner take the option of collecting $863,636.36.

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An export subsidy will ________ producer surplus, ________ consumer surplus, ________ government revenue, and ________ overall d
Paladinen [302]

Answer:

increase; decrease; decrease; decrease.

Explanation:

Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.

Basically, trade can be categorized into two (2) main groups and these are;

I. Import: this involves bringing in goods from a foreign country to sell in a different (domestic) country.

II. Export: it involves the sales of goods produced in a domestic country to a foreign country.

An export subsidy can be defined as any government policy that encourages the export of goods to other countries while discouraging the sales of goods in the domestic market through the use of tax reliefs, low cost loans, government foreign adverts, etc.

A surplus is the amount by which the quantity supplied of a good exceeds the quantity demanded of the good.

Producer surplus is the amount a buyer is willing to pay for a good minus the cost of producing the good.

Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Hence, an export subsidy will increase producer surplus, decrease consumer surplus, decrease government revenue, and decrease overall domestic national welfare.

5 0
2 years ago
a rectangular swimming pool has dimensions 45 metre by 20 metre concrete path of 3.5 m width is laid around it .Find the cost of
Anon25 [30]

Answer:

Rs. 5993.75

Explanation:

The computation of the cost of laying the path is given below:

= {area of(pool +path)- area of pool }

= ((45 + 3.5) × (20 + 3.5)) - (45 × 20)

= (48.5×23.5) - (45 × 20)

= 1139.75 - 900

= 239.75 square meters

Now the cost is

= 239.75 × 25

= Rs. 5993.75

8 0
3 years ago
Dumphy and Funke are rival tattoo artists in the small town of Feline. There are no other tattoo artists in town. It costs $30 t
inysia [295]

Answer:

<u>Part a:  What will be the equilabrium price that Dumphy and Funke will charge?</u>

Answer: Price charged = $30

<u>Part b: What are the profits for Dumphy and Funke at the equilibrium price?</u>

Answer: Profit on equilibrium price = $0

<u>Part c: What type of competition would Funke and Dumphy likely engage in after the decrease in demand?</u>

Answer: Price competition

Explanation:

<u>Part a:  What will be the equilabrium price that Dumphy and Funke will charge?</u>

Answer:

Price charged by each of the artists will be equal to their marginal cost.

Thus, equilibrium P = MC = $30.

<u>Part b: What are the profits for Dumphy and Funke at the equilibrium price?</u>

Answer:

Equilibrium profits will be 0 at the equilibrium because price charged is equal to MC, leading to no profits.

<u>Part c: What type of competition would Funke and Dumphy likely engage in after the decrease in demand?</u>

Answer:

Price competition - as changes in price will lead to changes in demand and thus sales

5 0
2 years ago
32. What is a predatory financial service?
Tresset [83]
<h2>Answer:</h2>

<h3>Predatory lending typically refers to lending practices that impose unfair,selective, or abusive loan term on borrowers.</h3>

<h2>Explanation:</h2>

<h3>Hope It's Help</h3>

<h3>#Carry On Learning</h3>

8 0
2 years ago
What would be the best time for a person to buy a franchise?
VashaNatasha [74]
When your financially comfortable
3 0
2 years ago
Read 2 more answers
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