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lara [203]
3 years ago
11

You just won the lottery, which promises you $260,000 per year for the next 20 years, starting today (annuity due). If your disc

ount rate is 7%, what is the present value of your winnings?
Business
1 answer:
Gekata [30.6K]3 years ago
4 0

Answer:

the present value of your winnings will be $2,947,254.76.

Explanation:

The Present Value, PV of the Annuity due can be calculated as follows :

Pmt = $260,000

P/yr = 1

n = 20

r = 7%

Fv = $0

Pv = ?

Using a financial Calculator, the Present Value, PV of the Annuity due is $2,947,254.76

You might be interested in
An investment offers $2,374 per year for 13 years, with the first payment occurring 1 year from now. If the required return is 8
Rom4ik [11]

Answer:

PV=  $18,763.56

Explanation:

Giving the following information:

Annual payment (A)= $2,374

Number of payments= 13

Discount rate (i)= 8%

<u>To calculate the present value, we need to use the following formula:</u>

<u></u>

PV= A*{(1/i) - 1/[i*(1 + i)^n]}

PV= 2,374*{(1/0.08) - 1 / [(0.08*(1.08^13)}}

PV=  $18,763.56

6 0
3 years ago
Collective Bargaining Westwood Industries is a company specializing in sheet metal fabrication. Most of its employees are member
Setler79 [48]

Answer:

Since Westwood's workers are not government workers, nor railroad or airline workers, nor farmers or domestic workers, they are allowed to strike by the National Labor Relations Act of 1935.

Unions are allowed to call media outlets, and they always do in order o increase public pressure against the company.

Massed picketing (forming barriers and not allowing workers to enter a factory) and sit down strikes are not legal, they are forbidden by the National Labor Relations Act.

8 0
3 years ago
Taser Industries must decide whether to make or buy some of its components. The costs of producing 175,000 battery packs for its
Andrei [34K]

Answer:

It is cheaper to produce in-house. Cost savings= $3500

Explanation:

We need to find whether it is better to produce in-house or to purchase to a supplier.

Q= 175000

Produce in house:

Direct Materials $15,000

Direct Labor $5,000

Variable overhead $6,000

Fixed overhead $9,000

Total cost= $35000

Outsource:

Purchase Cost= 175000q*$0.18= $31500

Fixed Cost= (9000-2000)= $7000

Total cost=$38500

It is cheaper to produce in-house. Cost savings= $3500

6 0
3 years ago
Which of the following are true?
natima [27]

Answer:

III and IV

Explanation:

You don't have to be interested in something to be good at it. A job you like and accommodates your interests is not a guaranty.

8 0
3 years ago
a-1. Annual payment of $1,025 for 11 years at 4% interest. (Do not round intermediate calculations. Round your answer to 2 decim
Karo-lina-s [1.5K]

Answer:

a-1//   8,979.49

a-2//    9613.14

b-1//    5,154.36

b-2//   4,676.51

Explanation:

We will calculate each present value using the formula for present value of an ordinary annuity:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

a-1

C 1,025

time 11

rate 0.04

1025 \times \frac{1-(1+0.04)^{-11} }{0.04} = PV\\

PV $8,979.4886

a-2

C 825

time 16

rate 0.04

825 \times \frac{1-(1+0.04)^{-16} }{0.04} = PV\\

PV $9,613.1439

b-1

C 1,025

time 11

rate 0.16

1025 \times \frac{1-(1+0.16)^{-11} }{0.16} = PV\\

PV $5,154.3605

b-2

C 825

time 16

rate 0.16

825 \times \frac{1-(1+0.16)^{-16} }{0.16} = PV\\

PV $4,676.5098

6 0
3 years ago
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