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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Jeff Heun, president of Wildhorse Always, agrees to construct a concrete cart path at Dakota Golf Club. Wildhorse Always enters into a contract with Dakota to construct the path for $233,000. In addition, as part of the contract, a performance bonus of $42,800 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreed-upon date. The performance bonus decreases by $10,700 per week for every week beyond the agreed-upon completion date. Jeff has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Jeff estimates, given the constraints of his schedule related to other jobs, that there is 55% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 15% probability that he will be 2 weeks late. a.) Determine the transaction…
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Sanjeev enters into a contract that pays him $1,000 each month for six months of continuous consulting services. In addition, there is a 40% chance the contract will pay an additional $3,000, depending on the outcome of the consulting contract. Sanjeev used the most likely amount to determine transaction price. After Sanjeev has recognized revenue for two months of the contract, he changes his assessment of the chance the contract will pay him $3,000 up to 70%. How much revenue would Sanjeev recognize in the third month of the contract? $2,500 O $1.500 $1,850 O $1,600

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