A group of ten UIC professors each contributed an equal amount to the purchase of a State of Illinois Lottery ticket. Two of the
1 answer:
Answer:
Total cost of Ticket = $96
Explanation:
Provided information,
Total number of people buying lottery ticket in a joint contribution = 10
Two people withdraw being short of funds, therefore people buying such ticket = 8
Revised share increase by $2.40 each.
Total increase = $2.40 8 = $19.20
Just because 2 people withdraw, thus earlier contribution per person = $19.20/2 = $9.60
Therefore, total cost of ticket = $9.60 10 = $96
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Answer:
a. project A; because its NPV is about $335 more than the NPV of project B.
Explanation:
As in the question it is mentioned that the required rate of return for project A and project B is 11.25% and 10.75% respectively.
Here we have to determined the net present value for both projects having different required rate of return
So based on the net present value the first option is correct as the project A is more than the project B
Therefore the first option should be accepted
