The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Filming is expected to take two years to complete. Each person signs independent contracts today with the following terms: Contract Terms Contract Amount Payment Date 2 years Derek Isabel Meredith George Required: $ 430,000 470,000 370,000 3 years 330,000 Today 1 year 1-a. Assuming an annual discount rate of 8%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 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. Filming is expected to take two years to complete. Each person signs independent contracts today with the following terms: Contract Terms Contract Amount Payment Date 2 years Derek Isabel Meredith George Required: $ 430,000 470,000 370,000 3 years 330,000 Today 1 year 1-a. Assuming an annual discount rate of 8%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 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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Rahul
Transcribed Image Text:Exercise 5-5 (Algo) Present value; single amount (LO 5-3)
The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Filming
is expected to take two years to complete. Each person signs independent contracts today with the following terms:
Contract Terms
Contract
Amount
Payment
Date
2 years
Derek
Isabel
Meredith
George
Required:
$ 430,000
470,000
3 years
370,000
330,000
Today
1 year
1-a. Assuming an annual discount rate of 8%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1.
and PVA of $1)
1-b. Which of the four actors is actually being paid the most?
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