The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?
The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person signs independent contracts with the following terms: Derek Isabel Meredith George Contract Terms Contract Amount $450,000 490,000 525,000 350,000 Payment Date 2 years 3 years Today 1 year Required: 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. 1-b. Which of the four actors is actually being paid the most?
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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Transcribed Image Text:The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Each person
signs independent contracts with the following terms:
Derek
Isabel
Meredith
George
Req 1A
Contract Terms
Contract
Amount
$450,000
490,000
525,000
350,000
Required:
1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount.
1-b. Which of the four actors is actually being paid the most?
Derek
Isabel
$
Complete this question by entering your answers in the tabs below.
Payment
Date
Req 1B
2 years
3 years
Today
1 year
Assuming an annual discount rate of 10%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of
$1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.)
Present Value
X Answer is complete but not entirely correct.
371,900.00
368,493.00 ×
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