Assume that you are a plaintiff and have won a structured settlement from a lawsuit that entitles you to $1 million each year over the next ten years
An attorney from the defense team approaches you afterward and offers you $6 million in exchange for your settlement. How would you go about evaluating whether this is a good deal for you or not?
You would first have to determine what the present value of each $1 million installment is worth by figuring out what rate of return you could reasonable expected to earn. This becomes your discount rate. Once you have calculated the present value of each of these $1 million installments over the next ten years you simply add them up. If they sum to less than $6 million then you should take the cash payment. If not then you should stay with your structured settlement.
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Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita
A) oranges and peaches are normal goods. B) oranges and peaches are substitutes. C) oranges and peaches are complements. D) oranges and peaches are inferior goods.
In the perfectly competitive market, individual firms exert no effect on the market price. Therefore, the firm's marginal revenue is:
A. zero. B. an upward-sloping curve. C. a downward-sloping curve. D. the same as the firm's demand curve.