Howie Long has just learned he has won a $506,300 prize in the lottery. The lottery has given him two options for receiving the payments.
(1) If Howie takes all the money today, the state and federal governments will deduct taxes at a rate of 46% immediately.
(2) Alternatively, the lottery offers Howie a payout of 20 equal payments of $37,000 with the first payment occurring when Howie turns in the winning ticket. Howie will be taxed on each of these payments at a rate of 26%.
Required:
1. Compute the present value of the cash flows for lump sum payout.
2. Assuming Howie can earn an 8% rate of return (compounded annually) on any money invested during this period, compute the present value of the cash flows for annuity payout.
3. Which pay-out option should he choose?
Answers: 3
Business, 21.06.2019 15:30
Kayla and jada are roommates in new york city. both kayla and jada recently received pay raises. kayla now buys more movie tickets than before, but jada buys fewer. kayla behaves as if movie tickets are goods and jada's income elasticity of demand for movie tickets is
Answers: 2
Business, 22.06.2019 21:40
Which of the following distribution systems offers speed and reliability when emergency supplies are needed overseas? a. railroadsb. airfreightc. truckingd. pipelinese. waterways
Answers: 2
Business, 23.06.2019 00:00
1. which of the following is true about how your skill set relates to a future career? (1 point) employers like to hire people with only full-time job experience. employers consider subject-specific skills for new positions. skills learned in high school should not be included. skills from part-time jobs and volunteer work may prove beneficial in future jobs. 2. which of the following is a list of broad categories of skills? (1 point) creativity, art and communications, tools and trade, literacy and language, and interpersonal skills english and literacy, tools and trade, mathematics, and creativity interpersonal skills, intrapersonal skills, writing and literacy, tools and trade, and creativity mathematics and data, words and literacy, tools and tasks, interpersonal relationships, and creativity
Answers: 3
Business, 23.06.2019 00:30
Three years ago, the city of recker committed to build a park and music venue by the river. it was expected to cost $2.5 million and be paid for from an additional meals tax in the community. the residents pushed back. local restaurants suffered as people ate out less or patronized restaurants in neighboring communities. the project has stalled, but the town council kept pushing it on. this spring, a flood devastated the venue. the town council appears to have suffered from bias
Answers: 3
Howie Long has just learned he has won a $506,300 prize in the lottery. The lottery has given him tw...
Biology, 25.08.2020 09:01
Social Studies, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01
English, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01
Mathematics, 25.08.2020 09:01