1 answer

O'Reilly is a masterful lottery player. The megamillion jackpot is now up to $200 million. If...

Question:


OReilly is a masterful lottery player. The megamillion jackpot is now up to $200 million. If OReilly wins the jackpot, he h
O'Reilly is a masterful lottery player. The megamillion jackpot is now up to $200 million. If O'Reilly wins the jackpot, he has a choice of receiving $200 million in five years or a smaller lump sum now. Advise O'Reilly on his choice under the following scenarios. Which option should he take and why? Use Exhibit 31. a. O'Reilly's after-tax return is 10 percent. If he chooses the current lump-sum option, the lottery will pay him $130 million b. O'Reilly's after-tax return is 10 percent. His current tax rate will be 35 percent if he receives the lottery payment now. His expected tax rate in five years will be 40 percent. If he chooses the current lump-sum option, the lottery will pay him $100 million

Answers

In Million $130(a) a) Current lump sum Lump sum after 5 years PV factor for 10% for 5 years Present value $200 0.620921 $124

.

Similar Solved Questions

1 answer
I need help with the whole question with a solution and explanation Please and Thank you....
I need help with the whole question with a solution and explanation Please and Thank you. Chapter 15 Homework i Saved Help Save & Exit Submit Check my work On March 1 a dressmaker starts work on three custom-designed wedding dresses. The company uses job order costing and applies overhead to ...
1 answer
The yellow highlighted part. thanks! Which structure is highlighted? 53:43 ces orksheet i Multiple cnoice tunica...
the yellow highlighted part. thanks! Which structure is highlighted? 53:43 ces orksheet i Multiple cnoice tunica media of large vein tunica intima of large vein O o naman ortige went lumen of large vein endothelium of large vein o tunica externa of large vein...
1 answer
Two automobiles are equipped with the same singlefrequency horn. When one is at rest and the...
Two automobiles are equipped with the same singlefrequency horn. When one is at rest and the other is moving toward the first at 13 m/s, the driver at rest hears a beat frequency of 6.0 Hz . Part A What is the frequency the horns emit? Assume T = 20° C. Express your answer to two significant fig...
1 answer
Match the molecular method with its function Increasing or amplifying the amount of DNA through replication...
Match the molecular method with its function Increasing or amplifying the amount of DNA through replication comparing individuals based on their unique nucleotide sequence Cutting DNA into smaller fragments Isolating DNA from other cellular components 1. PCR 2. restriction enzyme digestion 3. dna ex...
1 answer
3. In the process of collecting weight and height data from 29 female and 81 male...
3. In the process of collecting weight and height data from 29 female and 81 male students at your uni- versity, you also asked the students for the number of siblings they have. Although it was not quite clear to you initially what you would use that variable for, you construct a new theory that su...
1 answer
Calculus
1.Find y' given the following equation.y = ln(x2 + 5y2)2.A particle moves according to a law of motion s =f(t) = t3 - 6t2 + 9t, t 0, wheret is measured in seconds and s in feet.(a) Find the velocity at time t.(b) What is the velocity after 3s?(c) When is the particle at rest?Smaller Value and th...
1 answer
How does one’s worldview, philosophy, culture, values, and ethics impact the conduct of research and use...
How does one’s worldview, philosophy, culture, values, and ethics impact the conduct of research and use of its findings...
1 answer
3. Two parallel plates are 0.025 m apart (h): the lower plate is stationary and the upper plate m...
Can you make matlab solve it? 3. Two parallel plates are 0.025 m apart (h): the lower plate is stationary and the upper plate moves at a velocity (V ) of 2 ms. The shear stress (t) is estimated by where u, the viscosity in Ns/m2, is a fiunction that depends on the temperature. Laboratory measurement...
1 answer
3. (A) (Change of Variables) Evaluate the following integrals by making appropriate change of variables. (a)...
3. (A) (Change of Variables) Evaluate the following integrals by making appropriate change of variables. (a) // sin(x2 + y2) dA, where R is the region in the first quadrant bounded by the circle x2 + y2 = 5. YdA, where R is the parallelogram enclosed by the four lines 3. -Y x - 2y = 0, 2 - 2y = 4, 3...
1 answer
Show all possible reactions (Label reagents, products, reactants, and mechanisms) 1. Oxidative cleavage of an alkene(either...
Show all possible reactions (Label reagents, products, reactants, and mechanisms) 1. Oxidative cleavage of an alkene(either using KMnO./OH-/H.O or O/CH.Chat-78*C in DMSO)...
1 answer
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range...
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $166,300 to $208,000. Variable costs and their percentage relationship to sales are sales commissions 8%, advertising 4%, traveling 4%, and delivery 1%. Fixed selling expenses will consist ...
1 answer
6. Delley Inc. is considering the acquisition of equipment that costs $340,000 and has a useful...
6. Delley Inc. is considering the acquisition of equipment that costs $340,000 and has a useful life of 6 years with no salvage value. The incremental net cash flows that would be generated by the equipment are: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Incremental Net Cash Flows $94,000 $133,000 $9...
1 answer
The estimated annual cash flows for a proposed municipal government project are costs of $730,000 per...
The estimated annual cash flows for a proposed municipal government project are costs of $730,000 per year, benefits of $890,000 per year, and disbenefits of $160,000 per year. Calculate the conventional B/C ratio at an interest rate of 8% per year, and determine if it is economically justified. Th...
1 answer
X Company is trying to decide whether to continue using old equipment to make Product A...
X Company is trying to decide whether to continue using old equipment to make Product A or replace it with new equipment that will have lower operating costs. The following information is available: The new equipment will cost $45,000. Disposal value at the end of its 5-year useful life will be $5,...
1 answer
Why are oxidation reduction reactions important in cells?
Why are oxidation reduction reactions important in cells?...
1 answer
Solving a basic calorimetry probiem A 59.1 Е sample cr glass is put into a calorimeter...
Solving a basic calorimetry probiem A 59.1 Е sample cr glass is put into a calorimeter (see sketch at ryht) that contains 300.0 of nater. The glass sample starts all at 954 C and the temperature of the water starts off at 23.0 "C. When the temperature of the water seops changng it's 23...
1 answer
Determine the intervals on which the function fe) = 5x + x - 12 - 2x...
Determine the intervals on which the function fe) = 5x + x - 12 - 2x is increasing and the intervals on which it is decreasing....
1 answer
On January 1, 2018 Casey Corporation exchanged $3,218,000 cash for 100 percent of the outstanding voting...
On January 1, 2018 Casey Corporation exchanged $3,218,000 cash for 100 percent of the outstanding voting stock of Kennedy Corporation. Casey plans to maintain Kennedy as a wholly owned subsidiary with separate legal status and accounting information systems. At the acquisition date, Casey prepared t...