Which of the prizes has the highest present value

Assignment Help Financial Accounting
Reference no: EM132576154

Question 1: You have just won a prize, which gives you a choice as to how you receive the payments. If the interest rate is 10% per annum, compounded annually, which of the following prizes has the highest present value?

Option A. $2,000,000 immediately

Option B. An ordinary annuity of $300,000 per year for 10 years, starting one year from now

Option C. $3,000,000 at the end of 5 years

Option D. A perpetuity of $250,000 per year, starting one year from now.

Reference no: EM132576154

Questions Cloud

Who control the supply of physicians the government : Who control the supply of physicians the government or the American Medical Association (AMA)? Please support your response with references
Is there any way a large transfusion could be successfully : Is there any way a large transfusion could be successfully given to a type AB patient when there is no type AB blood available.
Prepare a report to the audit partner to explain : Prepare a report to the audit partner to explain if there are any updates needed to audit approach in general and in particular to the audit plan.
Find the minimum increase in peso sales : The minimum increase in peso sales of either XY-7 or BD-4 required to offset the increased advertising is
Which of the prizes has the highest present value : How you receive the payments. If the interest rate is 10% per annum, compounded annually, which of the following prizes has the highest present value?
Compute the days sales in receivables at the end of year : Compute the days' sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place
How you would complete the transactions in 1960 : How you would complete the following transactions in 1960.
What amount of adoption credit is allowed : What amount of adoption credit is allowed in 2019? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
Characteristics of cohort studies : In other words, what characteristics of cohort studies make them so important in the field of epidemiology?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate fica social security taxes payable

Calculate FICA Social Security taxes payable and FICA Medicare taxes payable by the employees of Royal Company.

  What is the amount shown as a cash inflow

If used equipment is sold at a gain, the amount shown as a cash inflow from investing activities equals the carrying amount of the equipment

  Compute the acquisition cost of the equipment

Compute the acquisition cost of the equipment. Clearly identify each element of cost

  Calculate the premium on the bonds

The price of the bonds will be slightly more than $1,000.The price of the bonds will be slightly less than $1,000.The price of the bonds will not change.

  Number of exemption and filling status

philip 68 age , paid cost of maintaining his mother age 102 in a home for aged entire year. Mother income 13000 social security income? Required standard deduction dollar and number of exemption and filling status

  Compute three ratios after evaluating effect of transaction

Compute the three ratios after evaluating the effect of each transaction that follows. Consider each transaction separately. (

  Finding the required interest rate

FINDING THE REQUIRED INTEREST RATE. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds

  Bond market related to the quantitative easing

Find an article about U.S. treasuries and the bond market related to the quantitative easing that occurred after the Great Recession. Cite the article and summarize what the author(s) have written about the topic. From your research, identify one are..

  Find out the price of the bonds at january

For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Find out the price of the bonds at January 1, 2011.

  Record the adjusting entry for tom investments

Interest is paid after one year and interest rates are 8%. Record the adjusting entry for Tom Investments on 31 July 2011.

  Marlene grady and pauline monroe are partners

Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop,doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals.

  Prepare a balance sheet at july 31

Prepare a balance sheet at July 31 and What is the total amount of property, plant, and equipment that will be reported on the balance sheet?

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