This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Randy W. recently won the Western States Lottery of 6,500,000. The lottery pays either a total of ... (Read 269 times)

LaDunn

  • Hero Member
  • *****
  • Posts: 526
on: Jul 10, 2018
Randy W. recently won the Western States Lottery of 6,500,000. The lottery pays either a total of twenty 325,000 payments per year with the first payment today (i.e., an annuity due), or 3,500,000 today.
 
  At what interest rate would Randy be financially indifferent between these two payout choices?
  A) 5.37
  B) 7.36
  C) 7.76
  D) 8.00

Question 2

SteelCo Production, Inc is considering the use of a lock-box collection system. SteelCo's average
  check receipt is 1,350. The company invests excess cash in money-market certificates and receives
  an average of 3.5 annual interest.
 
  The lock-box system will speed up SteelCo's collections by 2.5
  days. What is the maximum per check processing cost that SteelCo should be willing to pay for the
  lock-box system?
  A) 0.4519 B) 0.2987 C) 0.3236 D) 0.1871


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

akudia

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: C
Explanation: C) This is an iterative process (trial and error). Solve using the RATE function in Excel.
MODE = BEGIN
INPUT 20 ? -3,500,000 325,000 0
KEY N I/Y PV PMT FV
CPT 7.76

Answer to Question 2

C


LaDunn

  • Member
  • Posts: 526
Reply 2 on: Jul 10, 2018
:D TYSM

epscape

  • Member
  • Posts: 335
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

Common abbreviations that cause medication errors include U (unit), mg (milligram), QD (every day), SC (subcutaneous), TIW (three times per week), D/C (discharge or discontinue), HS (at bedtime or "hours of sleep"), cc (cubic centimeters), and AU (each ear).

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Chinese workers on a railway in the far West. “Without them,” Leland Stanford, president of the Cent Chinese workers on a railway in the far West. “Without them,” Leland Stanford, president of the Cent
How Safe Is Your State? Violent Crime in the United States How Safe Is Your State? Violent Crime in the United States
Anglin's estimates of the total vocabulary of children in Grades 1, 3, and 5 Anglin's estimates of the total vocabulary of children in Grades 1, 3, and 5
Three mechanics worked 15 1/2, 14 3/4, 18 1/8 hours respectively. What was the total Three mechanics worked 15 1/2, 14 3/4, 18 1/8 hours respectively. What was the total
The total weight of Peter, David and Henry is 123 kg, Peter is 15 kg heavier than David. David ... The total weight of Peter, David and Henry is 123 kg, Peter is 15 kg heavier than David. David ...
Prevalence rates of obesity in the United States, 2014 Prevalence rates of obesity in the United States, 2014
Video: Cellular Respiration & Glucose Mobilization (Glucose transport & Phosphorylation of Glucose)

For a complete list of videos, visit our video library