Posted by **Jessie** on Saturday, January 19, 2013 at 6:32pm.

Suppose the chances of winning the lottery are 1 in 14 million with the earnings of $20 million to the lucky winner. A ticket costs $1. However, the winnings are paid over 20 years, with

the first $1 million payment occurring immediately. If inflation is 2% per year ,and the winnings are taxable, is the lottery a good investment? (Assume that you are in a 40% marginal income tax bracket and that the appropriate nominal

discount rate is 10% per year.)

## Answer This Question

## Related Questions

- Statisics - The state lottery claims that its grand prize is $1 million. The ...
- Statisics - The state lottery claims that its grand prize is $1 million. The ...
- Statistics - The state lottery claims that its grand prize is $1 million. The ...
- math - A lottery game advertises a jackpot of $41 million. The chances of a ...
- Business Finance - Rita won $60 million lottery. She is to receive $1 million a ...
- Finance - Rock Company acquired land 8 years ago for 2.2 million. Today it is ...
- finance - Thelma and Louie's Inc started the year with a balance of retained ...
- statistics - Compute the expected return if two mega lottery tickets are sold ...
- Finance - Following are selected balance sheet accounts for Third State Bank: ...
- business - Computer World inc. paid out $22.5 million in total common dividends ...

More Related Questions