Won the state lottery, You have won the state lottery.

Won the state lottery

Assignment Help Business Economics

Reference no: EM131006219

You have won the state lottery. There are many ways in which you can receive your prize. You can either have $1 million in cash now or you can have $1.2 million that is paid out as follows:

$300,000 now, $300,000 in one year's time, $300,000 in 2 years time and $300,000 in three years time. You expect the interest rate to rise from 15% to 18% and then to 20% for years 1,2 and 3. How would you prefer to receive your prize? Show your work and explain.

Reference no: EM131006219

Questions Cloud

The permanent income hypothesis and life-cycle hypothesis : Describe how a change in income and/or walth impacts saving and consumption patterns under; 1) the permanent income hypothesis, 2) the life-cycle hypothesis; and 3) Halls random walk Hypothesis

Price elasticity of demand along a linear : Taco Bell firm raises the price of its tacos. The price elasticity of demand for Taco Bell tacos equals 5.0. What happens to the Taco Bell's total revenue? Which of the following statements is correct for the price elasticity of demand along a linear..

Consider the conversation : Consider the following conversation: Does the logic of the reader (G) make any sense, or does it violate economic reasoning?

Cordova tools has bonds outstanding during a year : Cordova Tools has bonds outstanding during a year in which the market rate of interest has risen. If Cordova has elected the fair value option for the bonds, will it report a gain or a loss on the bonds for the year? Explain.

Won the state lottery : You have won the state lottery. There are many ways in which you can receive your prize. You can either have $1 million in cash now or you can have $1.2 million that is paid out as follows: $300,000 now, $300,000 in one year's time, $300,000 in 2 yea..

About the trade : The country of Hykania does not trade with any other country. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $2 billion in transfer payments to households...

Respective estimated results in terms of budget surpluses : You have two sets of estimates of national account numbers for a closed economy for next year. In the first set, government expenditures will be $30 billion, transfer payments will be $10 billion, and taxes will be $45 billion. Based on these numbers..

What is the average memory access time : What is the average memory access time - Draw a pipeline diagram illustrating the first iteration of the loop assuming there are no instruction cache misses. Remember that there are two fetch stages

Explain ethical considerations in terms of informed consent : Choose a health care case study on ethical practices form your work environment or from a library article. Explain the basic ethical considerations in terms of informed consent, beneficence, truth telling, and deception.

User Account

All Pages