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Author Question: Capital budgeting techniques are used to evaluate a firm's fixed asset investments which provide the ... (Read 105 times)

futuristic

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on: Jul 10, 2018
Capital budgeting techniques are used to evaluate a firm's fixed asset investments which provide the basis for the firm's earning power and value.
 
  Indicate whether the statement is true or false

Question 2

Jia has just won a 20 million lottery, which will pay her 1 million at the end of each year for 20 years. An investor has offered her 10 million for this annuity.
 
  She estimates that she can earn 10 percent interest, compounded annually, on any amounts she invests. She asks your advice on whether to accept or reject the offer. What will you tell her? (Ignore Taxes)


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Madisongo23

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Reply #1 on: Jul 10, 2018
Answer to Question 1

TRUE

Answer to Question 2

P = (1,000,000/0.1 )  1-(1/(1.1 )203= 8,514,000
10,000,000 > 8,514,000
Accept the offer.


futuristic

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Reply 2 on: Jul 10, 2018
Wow, this really help

Mochi

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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