First prize in the centennial lottery

Assignment Help Financial Management

Reference no: EM131300314

You have just received notification that you have won the $2.14 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 66 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? (Enter your answer in dollars, not millions, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131300314

Questions Cloud

Technocorp have saved by hedging with forward contract : Technocorp has purchased industrial parts from a German company for a total cost of €1,225,000. The firm has 30 days to pay. A bank has given Technocorp a 30-day forward rate of $1.355/€. Assume that on the day the payment is due, the spot rate is $1..

What is the? bonds yield to? maturity : Boeing Corporation has just issued a callable? (at par)? three-year, 4.7 %4.7% coupon bond with? semi-annual coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $ 98.95$98.95. ..

Example of a global strategy : A country barters the surplus coffee beans it grows for other agricultural products grown in a neighboring country. There is no exchange of currency between these countries. The type of business arrangement between the two countries can be regarded a..

Simple interest on its savings account balances : First City Bank pays 6 percent simple interest on its savings account balances, whereas Second City Bank pays 6 percent interest compounded annually. If you made a deposit of $9,000 in each bank, how much more money would you earn from your Second Ci..

First prize in the centennial lottery : You have just received notification that you have won the $2.14 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 66 years from now. What is the present value..

The annual rate of interest in the savings account : Aaron, Bradford and Charles have been friends since childhood. At the high school graduation ceremony they decided to make a bet about who would be the fastest to save $50,000. Exactly 10 years later they met at the first high school reunion. The ann..

What rate of return would she have earned for the past year : Last year Janet purchased a $1,000 face value corporate bond with an 8% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 13.43%. If Janet sold the bond today for $1,127.99, what rate of r..

What are the current yield and capital gains yield : One year ago, Henderson Honey issued a 10-year bond for $1,000. The bond’s coupon rate of interest is 4 percent, and interest is paid annually. If the current value of the bond is $929, what are (a) the current yield and capital gains yield Henderson..

How can you ascertain your credit score : What are at least three things you can do to bolster your credit score and specify which factor might be improved for each of your suggestions. How can you ascertain your credit score ? Is this a smart thing to do? Why or why not?

User Account

All Pages