Round to 2 decimal places, NEAREST CENT (Present value) The state lottery\'s mil

Question

Round to 2 decimal places, NEAREST CENT

(Present value) The state lottery's million-dollar payout provides for $1 million(s) to be paid over 24 years in 25 payments of $40,000. The first $40,000 payment is made immediately, and the 24 remaining $40,000 payments occur at the end of each of the next 24 years. If 11 percent is the appropriate discount rate, what is the present value of this stream of cash flows? If 22 percent is the appropriate discount rate, what is the present value of the cash flows?

Explanation / Answer

Present Value of cash flow @11% is $373,925.46.

Present value of cash flow @22% is $220,280.02

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