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Black_prince [1.1K]
2 years ago
14

You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 equal annual installments. The first payme

nt is next year. How much is the prize really worth
Business
1 answer:
EastWind [94]2 years ago
3 0

The prize is really worth $1,006,512.21.

<h3>What is present value?</h3>

Present value is the sum of cash flows discounted at the rate of interest or the discount rate.  The annual cash flows for the next 10 years = $1.5 million / 10 = 150,000

The present value can be determined using a financial calculator

Cash flow from year 1 to 10 = $150,000

Discount rate = 8%

Present value = $1,006,512.21

Here is the complete question: You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 an¬nual installments. The first payment is next year. How much is the prize really worth? The discount rate is 8 percent.

To learn more about present value, please check: brainly.com/question/25748668

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A merit system of police employment is established when an independent civil service commission, in cooperation with the city pe
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Using college students as the market segment, describe the most relevant reference group(s) and indicate the probable degree of
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Answer and Explanation:

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Thus the aspirational group influences a student. So they opt for vegetarianism to become part of such a community. Such decision taking involves a high degree of control.

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4 0
3 years ago
Hartong Corporation is contemplating purchasing equipment that would increase sales revenues by $185,000 per year and cash opera
krek1111 [17]

Answer:

The simple rate of return on the investment is closest to: C. 10.6%

Explanation:

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This is the net income from the equipment per year

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ROI = (Net income/Cost of investment )x 100%

Cost of investment  = Cost of equipment = $416,000

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3 years ago
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What is the act of working in exchange for an income.?
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