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Question: note you must show all your work to receive full...

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Note: You MUST show ALL your work to receive FULL credit- that is, show timelines and calculator sequence to justify your answers. 1. Scott Frost has just won the Cornhusker Sweepstakes. He is entitled to receive one of the following prizes: a. $100,000 per year forever with the first payment received today b. $40,000 beginning next year growing by 4% forever. c. $200,000 for ten years starting in year 6. d. Ten payments of $150,000 per year starting one year from today. e. Five payments of $300,000 per year starting one year from today, then five more payments of $300,000 beginning eleven years from today. Assuming a discount rate of 10%, evaluate all of the alternative prizes and choose the prize that would have the greatest wealth maximizing effect for Frosty. (10 points)
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