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In: Finance
As the winner of the Standup sweepstakes, you are entitled to one of the following prizes:
As the winner of the Standup sweepstakes, you are entitled to one of the following prizes:
$999,999 payable immediately.
$125,000 per year forever (1st payment is a year from today).
$185,000 per year for 10 years (1st payment is received immediately).
The stated annual interest rate is 14 percent. Rank the alternatives in order of preference showing work (or relevant inputs to a program) for full credit.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
As the winner of the Standup sweepstakes, you are entitled to one of the following prizes:...
As the winner of the Standup sweepstakes, you are entitled to
one of the following prizes:
$999,999 payable immediately.
$125,000 per year forever (1st payment is a year from
today).
$185,000 per year for 10 years (1st payment is received
immediately).
The stated annual interest rate is 14 percent. Rank the
alternatives in order of preference showing work (or relevant
inputs to a program) for full credit.
As winner of a breakfast cereal competition, you can choose one of the following prizes: a....
As winner of a breakfast cereal competition, you can choose one
of the following prizes: a. $180,000 at the end of five years. b.
$11,400 a year forever. c. $19,000 for each of 10 years. d. $6,500
next year and increasing thereafter by 5% a year forever. Assume
that the discount rate is 12%. i. (20 pts) Write down the
discounted cash flow equation for each option.
As a winner of a lottery you can choose one of the following prizes: 1) £1...
As a winner of a lottery you can choose one of the following
prizes:
1) £1 million now.
2) £1.5 million at the end of six years.
3) £80,000 a year forever, starting in one year.
4) £150,000 for each of the next ten years, starting in one
year.
If the discount rate is 8 per cent, which is the most valuable
prize?
As a winner of a breakfast cereal competition, you can choose one of the following prizes:...
As
a winner of a breakfast cereal competition, you can choose one of
the following prizes: a) 11,000 a year (forever) and starting NEXT
year b) 12,000 a year (forever) and starting THIS year c) 3,000
next year and increasing thereafter by 2% a year forever d) 7,000
starting this year, geowing at 1% per annum e) 800,000 at the end
of 20 years f) 6,000 a year for 5 years starting next year g) 1,000
a year starting this...
As a winner of a breakfast cereal competition, you can choose one of the following prizes:...
As a winner of a breakfast cereal competition, you can choose
one of the following prizes:
$100,000 now.
$100,000 at the end of 5 years.
$10,000 a year forever (starting from this year).
$11,000 a year forever (starting from next year).
$2,000 next year and increasing thereafter by 2% a year
forever
$6,000 starting this year, growing at 1% per annum
$800,000 at the end of 20 years
$5,000 a year for 5 years starting next year
$1,000 a year,...
Prizes and the chances of winning in a sweepstakes are given in the table below. Prize...
Prizes and the chances of winning in a sweepstakes are given in
the table below. Prize Chances $10,000,000 1 chance in 200,000,000
$350,000 1 chance in 200,000,000 $25,000 1 chance in 90,000,000
$5,000 1 chance in 4,000,000 $400 1 chance in 500,000 A watch
valued at $90 1 chance in 4,000 (a) Find the expected value (in
dollars) of the amount won by one entry. (b) Find the expected
value (in dollars) if the cost of entering this sweepstakes is...
Suppose that an Irish Sweepstakes winner deposits $10 million in cash into her transactions account at...
Suppose that an Irish Sweepstakes winner deposits $10 million in
cash into her transactions account at the Bank of America. Assume a
reserve requirement of 25 percent and no excess reserves in the
banking system prior to this deposit. Show the changes on the Bank
of America balance sheet when the $10 million is initially
deposited.
One state lottery has 1,100 prizes of $1; 135 prizes of $10; 15 prizes of $50;...
One state lottery has 1,100 prizes of $1; 135 prizes of $10; 15
prizes of $50; 5 prizes of $310; 2 prizes of $1,150; and 1 prize of
$2,500. Assume that 22,0000 lottery tickets are issued and sold for
$1. Round final answer to four decimals.
1. What is the lottery's expected profit per ticket?
2. What is the lottery's standard deviation of profit per
ticket?
One state lottery has 1,100 prizes of $1; 120 prizes of $10; 30 prizes of $50;...
One state lottery has 1,100 prizes of $1; 120 prizes of $10;
30 prizes of $50; 5 prizes of $285; 2 prizes of $1,180; and 1 prize
of $2,400. Assume that 34,000 lottery tickets are issued and sold
for $1. Round to 4 decimal places for the answers
What is the lottery's expected profit per ticket?
What is the lottery's standard deviation of profit per
ticket?
One state lottery has 1,000 prizes of $1; 130 prizes of $10; 20 prizes of $55;...
One state lottery has 1,000 prizes of $1; 130 prizes of $10; 20
prizes of $55; 5 prizes of $300; 2 prizes of $1,010; and 1 prize of
$2,500. Assume that 31,000 lottery tickets are issued and sold
$1
What is the lottery's expected profit per ticket?
What is the lottery's standard deviation of profit per
ticket?
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