Gary King, a professional athlete, currently has a contract that will pay him a large amount in the first year of his contract and smaller amounts thereafter. He and his agent have asked the team to restructure the contract. The team, though reluctant, obliged. Gary and his agent came up with a counteroffer. Year 1 2 3 4 Current Contract $7,318,000 $3,585,820 $3,870,000 $4,063,500 $2,655,000 $3,770,100 $1,707,000 $3,670,050 Problem 6.34 a-d(a) Your answer is correct. Present value Team's Offer What is the present values of Current Contract using a 14 percent discount rate? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) eTextbook and Media Problem 6.34 a-d(b) 12,199,867.99 Using multiple attempts will impact your score. 50% score reduction after attempt 2 Counteroffer $4,756,700 $8,010,900 $3,557,700 $2,628,780 Attempts: 1 of 3 used What is the present values of Team's Offer using a 14 percent discount rate? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.)

Gary King, a professional athlete, currently has a contract that will pay him a large amount in the first year of his contract and smaller amounts thereafter. He and his agent have asked the team to restructure the contract. The team, though reluctant, obliged. Gary and his agent came up with a counteroffer. Year 1 2 3 4 Current Contract $7,318,000 $3,585,820 $3,870,000 $4,063,500 $2,655,000 $3,770,100 $1,707,000 $3,670,050 Problem 6.34 a-d(a) Your answer is correct. Present value Team's Offer What is the present values of Current Contract using a 14 percent discount rate? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) eTextbook and Media Problem 6.34 a-d(b) 12,199,867.99 Using multiple attempts will impact your score. 50% score reduction after attempt 2 Counteroffer $4,756,700 $8,010,900 $3,557,700 $2,628,780 Attempts: 1 of 3 used What is the present values of Team's Offer using a 14 percent discount rate? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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In March 2018, the Buffalo Bills signed Star Lotulelei to a contract reportedly worth $50 million. Lotulelei's salary (including bonuses) was to be paid as $17.1 million in 2018, $8.9 million in 2019, $7.5 million in 2020, and $8.25 million in 2021 and 2022. If the appropriate interest rate is 11 percent, what kind of deal did the defensive tackle sack? Assume all payments are paid at the end of each year. (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89.) Present value
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In 2021, a basketball player signed a contract reported to be worth $60.8 million. The contract was to be paid as $8.2 million in 2021, $9.7 million in 2022, $10.6 million in 2023, $10.7 million in 2024, $10.7 million in 2025, and $10.9 million in 2026. If the appropriate interest rate is 10 percent, what kind of deal did the player dunk? Assume all payments are paid at the end of the year. Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. Present value
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A baseball player is offered a 5-year contract that pays him the following amounts: Year 1: $1.26 million Year 2: $1.87 million Year 3: $2.49 million Year 4: $2.54 million Year 5: $3.15 million Under the terms of the agreement all payments are made at the end of each year. Instead of accepting the contract, the baseball player asks his agent to negotiate a contract that has a present value of $1.63 million more than that which has been offered. Moreover, the player wants to receive his payments in the form of a 5-year ANNUITY DUE. All cash flows are discounted at 12.00 percent. If the team were to agree to the player's terms, what would be the player's annual salary (in millions of dollars)? (Express answer in millions. $1,000,000 would be 1.00)
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