What is present value of the girls fortune

Assignment Help Finance Basics
Reference no: EM13261392

Could you please help me solve this question? A 5 year girl was given a lottery ticket for her recent birthday. The ticket was the grand prize winner and suppose to pay $50,000 per year after taxes, for 20 years. The state sued, however, and won the case arguing that it would pay the prize as agreed, but it would not begin payment until the girl reaches age of 18 in exactly 13 years. If the appropriate discount rate is 7% annually, what is present value of the girl's fortune?

Reference no: EM13261392

Questions Cloud

Calculate the new induced emf : A slinky with N even loops of area A is L long. You hook it up to a circuit and increase the current at a rate of 2.0 A/s, Now calculate the new induced EMF
Which alternative is better deal : Assume that if you take the rebate, you will apply it toward the purchase. Which alternative is better deal?
What discount rate is being used to value the stock : Everest, Inc.'s preferred stock has a par value of $1,000 and a dividend equal to 13.0% of the par value. The stock is currently selling for $907.00.
How many helium atoms are in the cylinder : A 20.0cm -diameter cylinder of helium gas is 50.0cm long and at 30.0 ?C. The pressure gauge reads 130psi, How many helium atoms are in the cylinder
What is present value of the girls fortune : If the appropriate discount rate is 7% annually, what is present value of the girl's fortune?
Develop the linear trend equation for this time series : Consider the following time series.t 1 2 3 4 5 6 7Yt 120 110 100 96 94 92 88a. Construct a time series plot. What type of pattern exists in the data
Vision of human flourishing : Like the ancients, Marx felt that human freedom is achieved through the community, rather than it opposition to it. But like Rousseau, he does not advocate "going back" to a "simpler," "organic" society
What is the dividend discount model mean : Explain how you can use the time value of money concept in stock valuation? What's the Dividend Discount Model mean?
Determine what is the gain of the amplifier : A field technician measures the signal level at the output of a cable amplifier as 42.5 dBm, and measures the input to the same amplifier as 24.8 dBm. What is the gain of the amplifier

Reviews

Write a Review

Finance Basics Questions & Answers

  What is your estimate of the current stock price

Sully Corp. currently has an EPS of $4.00, and the benchmark PE for the company is 39. Earnings are expected to grow at 5 percent per year.

  What are some of the tools a manager may use in helping

What are some of the tools a manager may use in helping an investor achieve his or her financial goals.

  Find the amount needed for living expenses

A family spends dollar 34,000 a year for living expenses. If prices increase by 4% a year for the next 3 years, what amount will the family need for their living expenses after 3 years?

  Determine the expected value of return

X comapny is planning the pruchase of one of two microfilm cameras, R and S. Both should provide benefits over a 10-year period, and each requires an initial investment of $4,000.

  Stock valuation beneath equilibrium situation

Stock valuation beneath equilibrium situation and Assuming the stock market is efficient and the stocks are in equilibrium

  Computation of ratios for given financial statement data''s

Computation of ratios for given financial statement data's and you have been provided with the financial statements for Grannie's Closet for the last three years

  Remake the by factoring out the greatest common factor

The value of an investment of 'P' dollars for 't' years at simple interest rate "r" is given by A= P + Prt. Remake this formula by factoring out the greatest common factor

  Calculating annual payments

Leases R Us, Corporation has been contracted by Robotics of Beverly Hills to provide lease financing for a machine that would assist in automating a large part of their current assembly line.

  Calculate the debt ratio and time interest earned

Laurel Street, president of Uvalde Manufacturing Corporation is planning a proposal to present to her board of directors regarding a planned plant expansion that will expense $10 million.

  Computation of number of shares to be issued for purchase

Computation of the number of shares to be issued for purchase of the machinery and How many shares of stock must The Pasta Maker sell to finance its new machinery

  Find value of missing cash flow

The present value of the following cash flow stream is $5,744 when discounted at 12 percent annually. The value of the missing cash flow is;

  Benefits of risk management

When planning the benefits of risk management, why would you say that historical information is a benefit of risk management?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd