Business, 21.05.2020 06:57 tmrodriguez1

Martha Gentry won a $16,800,000 lottery and elected to receive her winnings in 30 equal annual installments. After receiving the first 10 installments, Martha and her husband divorced, and the remaining 20 payments became part of the property settlement. The judge who presided over the divorce proceedings awarded one-half interest in the future lottery payments to Martha and the other half to her ex-husband. Following the divorce, Martha decided to sell her interest in the 20 remaining lottery payments to raise the cash needed to open a flower store. An investor has offered Martha $2,555,980.What discount rate did the investor use in calculating the purchase price?

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Martha Gentry won a $16,800,000 lottery and elected to receive her winnings in 30 equal annual insta...

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