Suppose you hit a progressive jackpot on a 25-cent Fortunemaker slot machine in a casino in Las Vegas and are given the choice of the following prizes:
Prize 1: $200,000 to be received right away, with four additional payments of $200,000 to be received each year for the next four years.
Prize 2: $750,000 to be received right away.
If the interest rate is 3 percent, what is the present value of each prize?
Prize 1: Present value = $200,000 + [$200,000 / (1 + 0.03 )] + [$200,000 / (1 + 0.03 )2] + [200,000 / (1 + 0.03 )3] + [$200,000 / (1 + 0.03 )4 = $943,419.68
Prize 2: Present value = $750,000
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Which of the following is not evidence of the lower standard of living among less-developed countries?
a. High per capita real GDP. b. High percentage of households headed by females. c. High infant mortality rate. d. Low life expectancy. e. High birth rate.
Labor markets are generally perfectly competitive markets.
Answer the following statement true (T) or false (F)