A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of return is 4.5%, what is the present value of this prize?

Answers

Answer 1

    The present value of this lottery prize has an amount of P = $650,396.82.

What is ordinary annuity?

  Ordinary annuity is defined as the process by which payments are made at the end of each period, in order to determine the present value under this analysis we must use the following equation:

P = R[1-(1-(1 +i)ⁿ/ i]

Where:

P : Is present valueR : is the payments at the end of the periodn : is the number of periodsi : is the interest rate

  We substitute the values in the equation described:

P = $50000[1-(1 + 0.045)²⁰/ 0.045]

P = $650.396,82

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Related Questions

According to douglas mcgregor, managers should pay more attention to __________.

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According to Douglas McGregor, managers should pay more attention to social and self-actualization needs.

Who was Douglas McGregor?

In addition to teaching management at the MIT Sloan School of Management, Douglas Murray McGregor served as the institution's president from 1948 to 1954. In addition, he was a professor at the Indian Institute of Management in Kolkata. His 1960 book The Human Side of Enterprise had a significant impact on educational procedures.

Abraham Maslow taught McGregor. His Theory X and Theory Y, which were presented in his book "The Human Side of Enterprise" (1960), are best known for their suggestion that a manager's individual presumptions about human nature and behavior determine how they manage their employees. He has made significant contributions to the development of management and motivational theory.

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Law firms sometimes ask their employees to pad their billable hours or charge customers for tasks they did not perform. this is an example of ________.

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There are times when law firms push their staff to increase their billable hours or bill clients for services they did not provide. An illustration of unethical behavior might be this.

What is an unethical behavior?

An act that goes against what is morally right for a person, a business, a profession, or in politics is deemed unethical behavior. Additionally, it can refer to a person's actions that go against the values upheld in the neighborhood where they reside. Person acting unethically: lying to loved ones, friends, and coworkers in order to obtain dishonest gain; robbing a home or job; borrowing money from a friend and not paying it back with the intent to defraud him; maintaining an extramarital relationship; criticizing friends, family, or coworkers behind their backs; conducting personal business during work hours; manipulating expense reimbursements; and selling a property without disclosing its flaws.

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A firm has a return on equity of 20 percent. the total asset turnover is 1.9 and the profit margin is 8 percent. the total equity is $5400. what is the net income?

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A firm has a return on equity of 20 percent. the total asset turnover is 1.9 and the profit margin is 8 percent. the total equity is $5400.

Net profit equals.20 x $5,400, or $1,080.

Definition and Calculation of Return On Equity (ROE)

A financial metric called return on equity (ROE) measures a company's efficiency in relation to the equity of its owners. The statistic Return On Equity (ROE), like Return On Assets (ROA), aids investors in determining how effectively a company generates return on investment. This article examines the definition of ROE, its significance, and its application to investors.

ROE Calculator

Divide a company's net income by the equity held by its shareholders to get return on equity. Then double that amount by 100 to express it as a percentage.

ROW is calculated as (Net Income / Shareholder Equity) * 100.

An illustration of the ROE Formula, which states that ROE is calculated as net income divided by shareholder value

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The private ownership of property resources and the use of markets and prices to direct and coordinate economic activity are characteristic of?

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The private ownership of property resources and use of prices to direct and coordinate economic activity is characteristic of a market system.

Define economic activity?

Economic activities are all those endeavours that generate products and services that contribute to the gross national product. Also, Economic activities are those that a man engages in to earn his living through salary, resources, and other financial gains. These activities cover all facets of life, including production, distribution, and consumption of commodities and services. A process that results in the production of a thing or the delivery of a service based on inputs is known as an economic activity.

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Which ideas are good ones to keep in mind when trying to come up with a research idea?

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The key to locating a good research idea is to find a topic that:

4) You want to know more about

What are the 5 most important things you will require to research about your topic?

5 Steps for How to Research

Step 1: Pick a Subject.

Step 2: Are There Adequately Sources?

Step 3: Validation: Find the Finest Sources.

Step 4: Make Reminders.

Step 5: Organize Your Details.

Ideas for research problems or topics can emerge from a range of sources such as personal or professional knowledge, a theory, the media, or other research studies.

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Which action could be an example of how the occupational safety and health administration plays a role in the legal environment for human resource management?

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example of how the occupational safety and health administration plays a role in the legal environment for human resource management - filing suit against violators of equal opportunity laws

What do you mean by human resource management?

Human resource management is a strategic method to successfully and efficiently managing people in a company or organisation so that they contribute to their firm's capacity to compete favourably (HRM or HR). In order to effectively manage people inside firms, human resource management focuses on policies and systems. The design of employee benefits, hiring, training, development, performance reviews, and reward management, including pay and benefit administration, fall within the purview of HR departments. HR is also concerned with organisational change, labour relations, and reconciling organisational requirements with those imposed by collective bargaining agreements and governmental regulations.

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In the foreign exchange market, ________ seek all of their profit from exchange rate changes while ________ seek to profit from simultaneous exchange rate differences in different markets.

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Speculators and arbitrageurs compete for the same profits on the foreign exchange market, while the former seeks to profit from simultaneous exchange rate disparities in other markets.

A financial tactic called arbitrage entails buying a security on one market and selling it on another for a marginally higher price. Speculation is predicated on conjectures and instincts. Arbitrage carries a relatively low level of risk, whereas speculation carries a higher level of potential loss and gain. This kind of strategy entails holding a sizeable position in a security that is traded at a variety of prices in two different markets.

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What are the two indicators that can send the message a company has customer-friendly systems in place?

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Two essential qualities to a “customer-friendly” system are:

CommunicationRelationships

What creates a good customer service?

The key to good customer service is creating good relationships with your customers. Thanking the customer and encouraging a positive, practical and friendly environment will ensure they depart with a great impression. A happy customer will produce often and is possible to spend more.

What are the 5 grades of customer service?

When interviewing prospects, look for these consumer service qualities, traits and skills. Look for someone who is communicative, compelling, is polite, patient, conscientious, and loyal.

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Companies predict how many purchases a single customer might make from the company over the length of the relationship with that consumer, a measurement called the ______.

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The measurement is called the Customer Lifetime Value. Customer lifetime value (CLV) is the sum of a customer's value to a company over the course of their relationship

Increasing the value of your existing customers is a wonderful strategy to spur growth since it is less expensive to retain existing customers than it is to attract new ones.Why is client lifetime value essential and what does it mean?One of the most important metrics for knowing your customers is client lifetime value. It foretells the value that a customer relationship could have for your company. Using this strategy, businesses may illustrate the potential benefit of their marketing operations in the future.

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Boeing and airbus both had to make difficult decisions to address ethical missteps. Airbus’ decision to dismiss over 100 employees due to ethics and compliance reasons is tied to which managerial role?.

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Boeing and Airbus both had to make difficult decisions to address ethical missteps. Airbus’ decision to dismiss over 100 employees due to ethics and compliance reasons is tied to Decision making as a managerial role.

The role stated in Decision Making as a managerial role in the given question is Disturbance Handler.

Disturbance Handler: In this position, managers must make decisions on uncontrollable, stressful, and unpredictable circumstances that are unsettling. For instance, managers must mediate disputes between subordinates as well as between their departments and other departments.

The role stated in Decision Making as a managerial role in the given question is Disturbance Handler.

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