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

Author Question: A budget should set optimistic goals even though it may be difficult to achieve them. Indicate ... (Read 63 times)

NguyenJ

  • Hero Member
  • *****
  • Posts: 516
on: Jul 11, 2018
A budget should set optimistic goals even though it may be difficult to achieve them.
 
  Indicate whether the statement is true or false

Question 2

Congratulations you have just won the tuition lottery The lottery pays out four beginning-of-the-year cash flows of 50,000 each with the first cash flow today and the remaining cash flows to follow at the start of years 2, 3, and 4.
 
  Since the lottery is managed by the Fergetaboutit University system you are considering their offer of a lump sum of 160,000 today. If after considering all of he relevant economic factors, you conclude it is reasonable to use a 12 interest rate to compare these two offers. Which offer should you take and why?
  A) Take the lump sum because the annuity PV is only 151,867.47.
  B) Take the annuity because the PV of 170,091.56 is greater than the lump sum.
  C) Take the annuity because the PV of 238,966.40 is greater than the lump sum.
  D) Take the lump sum because the annuity PV is only 135,595.95.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

durant1234

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jul 11, 2018
Answer to Question 1

FALSE

Answer to Question 2

B
Explanation: B) Via Calculator: N =4, I =12, PMT = 50,000, set timing to Begin, Solve for PV = 170,091.56.


NguyenJ

  • Member
  • Posts: 516
Reply 2 on: Jul 11, 2018
Gracias!

T4T

  • Member
  • Posts: 348
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

Congestive heart failure is a serious disorder that carries a reduced life expectancy. Heart failure is usually a chronic illness, and it may worsen with infection or other physical stressors.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

The platypus is very difficult to spot even on the surface of a river. The platypus is very difficult to spot even on the surface of a river.
In the communication technique of collaborating, the nurse sends the message that the nurse and pati In the communication technique of collaborating, the nurse sends the message that the nurse and pati
When parents actively support higher education, their children achieve more in their future careers. When parents actively support higher education, their children achieve more in their future careers.
Propaganda to influence public opinion surrounds us, but most propaganda is covert, difficult to ... Propaganda to influence public opinion surrounds us, but most propaganda is covert, difficult to ...
(A) In hyperopia, light rays focus behind the retina, making it difficult to focus on objects at ... (A) In hyperopia, light rays focus behind the retina, making it difficult to focus on objects at ...
Sample client goals from the Wellness Massage Pyramid. Sample client goals from the Wellness Massage Pyramid.
Video: Supine Position

For a complete list of videos, visit our video library