1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
GREYUIT [131]
3 years ago
8

Suppose you win a small lottery and have the choice of two ways to be paid: You can accept the money in a lump sum or in a serie

s of payments over time. If you pick the lump sum payout, you get $2,950 today. If you pick the payments over time payout, you get three payments: $1,000 today, $1,000 one year from today, and $1,000 two years from today. At an interest rate of 8% per year, you would be better off accepting the payout since it has the greater present value. At an interest rate of 10% per year, you would be better off accepting the payout since it has the greater present value. Years after you win the lottery, a friend in another country calls to ask your advice. By wild coincidence, she has just won another lottery with the same payout schemes. She must make a quick decision about whether to collect her money under the lump sum payout or the payments over time payout. What is the best advice to give your friend
Business
1 answer:
Salsk061 [2.6K]3 years ago
8 0

Answer:

take the payments over time payout

Explanation:

My personal opinion/advice would be to take the payments over time payout. There are many reasons for this, the first one being that most individuals are not used to receiving large sums of cash and usually end up wasting all the money as soon as they receive it, which usually does not occur if the payments are made over time. The second and more important reason is that if the payments are made over different years your would pay a much lesser amount on taxes every year that passes. This means that the even with the interest rate you would most likely have more overall money if you take the payments over time.

You might be interested in
3)You have won a contest and are allowed to choose between two prizes. One option is to receive$200 today and another $200 one y
vekshin1

Answer:

C)25 percent

Explanation:

Present value is the sum of discounted cash flows.

The interest rate where the present value of the two two prizes would be identical can be found using a financial calculator and trial and error method.

Option A :

Cash flow for year zero = $200

Cash flow for year one = $200

Present value when I is 0 = $400

Present value when I is 5 = $390.48

Present value when I is 10 = $381.82

Present value when I is 25 = $360

Option B

Cash flow in year 0 =$100

Cash flow in year 1 = $325

Present value when I is 0 = $425

Present value when I is 5 = $409.52

Present value when I is 25 = $360

Present value when I is 10 = $395.45

It can be seen that it's at 25% that both cash flows would be equal.

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

8 0
3 years ago
Making selection decisions by subjectively combining sources of information according to the general impression of the hiring sp
adelina 88 [10]
This is often referred to as the clinical approach. The clinical approach is also known as the threshold approach to clinical decision making. This approach combines rational and quantitative information with a general approach to decision making. In this situation, say you were hiring a new employee, a person using the clinical approach would look at their resume in how they match up with numbers and on paper to the candidate their looking for but also who they are as a person in a general sense. 
7 0
3 years ago
Fernando was thrilled to find out that his company had just decided to invest a great deal of money in the product he was managi
Anestetic [448]

Answer:

<u>A Star.</u>

Explanation:

The Boston Consulting Group (BCG) matrix depicts a product's market share against the market growth rate. The matrix is also known for it's cow- dog metaphor.

The matrix represents 4 situations namely:

1. Stars : Products with high market share in high growth markets i.e high- high situation.

2. Cash Cows: Products with high market share in low growth markets.

3. Question Mark: Products with low market share in a high growth markets.

4. Dogs:  Products with low market share in low growth markets.

In the given case, the product dominates the market i.e high market share. Secondly, it operates in a high growth market. Which means, the product belongs to the situation of a Star.

8 0
3 years ago
Jaron’s Internet is not functioning. A person from which pathway would best aid Jaron in fixing the issues with his Internet? a
ASHA 777 [7]

Answer:

A person In technology

Explanation:

4 0
3 years ago
Read 2 more answers
(Consider This) In 1975, McDonald's introduced its Egg McMuffin breakfast sandwich, which remains popular and profitable today.
Masteriza [31]

Answer:

C. consumer sovereignty.

Explanation:

Consumer sovereignty in economics imply that consumers have the power to determine what will be produced. They do this by demanding for products they want, increasing its supply and demanding less of products they do not want which reduces its supply.

I hope my answer helps you

7 0
3 years ago
Other questions:
  • A chemical company that produces fertilizer for farms is partnering with an eco-friendly products group to brand an animal-frien
    14·1 answer
  • Which type of loan requires that you pay the interest accumulated during college?
    7·2 answers
  • E first phase of the writing process involves writing a rough draft of your message.
    15·1 answer
  • Which of the following is not a type of savings account? A) money market savings B) savings bonds C) basic savings D) certificat
    14·2 answers
  • Zaira, a registered nurse, is tired of working long hours at the hospital and is looking for a different job in her field. What
    14·1 answer
  • Radu is a global manufacturer of automotive parts. The annual reporting period ends Dec. 31. Below find balances for all of its
    10·1 answer
  • The purpose of planning is setting goals and formulating operational plans to achieve those goals. Managers spend a great deal o
    10·1 answer
  • Maurice offered to sell his used computer to Mike for $300, and Mike accepted. Both Maurice and Mike believed that the computer
    15·1 answer
  • What is term structure of interest rate?​
    14·2 answers
  • To emphasis on profit alone in introducing a product to the market will misdirect managers to the point where they may endanger
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!