Reference no: EM132648763

You have just paid $20 million in the secondary market for the winning Powerball lottery ticket. The prize is $2 million at the end of each year for the next 25 years. If your required rate of return is 8 percent, what is the net present value (NPV) of the deal? (enter your answer to the nearest whole dollar)

Buzz Lightyear has been offered an investment in which he expects to receive payments of $4,000 at the end of each of the next 10 years in return for an initial investment of $10,000 now. Enter percentage values to 2 decimals (10.52% entered as 10.52)

VOTD Pharmaceuticals is considering the mass production of a new sleeping pill. Neely O'Hara, VOTD's financial analyst, has gathered all the available information from the finance, production, advertising, and marketing departments and has estimated that the yearly net incremental cash flows will be $298,500. She estimates the initial investment for this project will be $2 million. The pills are expected to be marketable for 10 years, and Neely does not expect that any of the investment costs will be recouped at the end of the 10-year period. VOTD's required rate of return for average-risk projects is 8 percent. Two percent is added to the required rate of return for high-risk projects.

Calculate the net present value of the project if VOTD management considers it to be of average risk. Enter your answer rounded to the nearest whole dollar.