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Viefleur [7K]
3 years ago
8

You have just won the lottery and will receive $560,000 in one year. You will receive payments for 22 years, and the payments wi

ll increase 3 percent per year. If the appropriate discount rate is 10 percent, what is the present value of your winnings?
Business
1 answer:
spin [16.1K]3 years ago
5 0

Answer:

$6,116,915

Explanation:

to solve this question you can use an excel spreadsheet to determine the 22 payments. Just type 560000 in the first cell and the second cell = A1 * 1.03, then you drag down until the 22th cell.

Once you have completed the 22 cells, you just go to financial formulas and look for NPV and enter 10% rate and select the 22 cells.

=NPV(10%,560000,...1041765) = $6,116,915

The NPV function actually doesn't give you the NPV it only calculates the present value of the cash flows.

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6 0
1 year ago
A monopolist:
Llana [10]

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The answer is C. can earn profits or incur losses in the short run.

Explanation:

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5 0
4 years ago
In addition to​ risk-free securities, you are currently invested in the Tanglewood​ Fund, a​ broad-based fund of stocks and othe
Murrr4er [49]

Answer:  6.29%

Explanation:

Required return = Risk free rate + beta ( expected return - risk free rate)

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7 0
4 years ago
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jekas [21]

Answer:

Foreign Direct Investment

Explanation:

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4 0
4 years ago
For a stock to be in equilibrium, that is, for there to be no long-term pressure for its price to depart from its current level,
Alex_Xolod [135]

Answer:

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Therefore the option c is correct

And, the other options that are mentioned in the question are incorrect

4 0
4 years ago
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