What is the present value of winnings

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Reference no: EM131993466

1. The Clearinghouse Sweepstakes has just informed you that you have won $1 million. The amount is to be paid out at the rate of $50,000 a year for the next 20 years. With a discount rate of 6 percent, what is the present value of your winnings?

2. You invest $7,000 in stock and receive dividends of $65, $70, $70, and $65 over the following four years. At the end of the four years, you sell the stock for $7,900. What was the IRR on this investment? Note. please dont use graphs. Explain in easy way.

Reference no: EM131993466

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