TSN reported that Kyle Lowry just signed a "four-year, $130 million deal" with the Toronto Raptors. The terms of the contract include a signing bonus of $5 million and salaries of $25 million, $28.5 million, $35 million, and $36.5 million in successive years of the contract. As you know, the media always misstates the "value" of sports contracts. What is the economic value of Kyle's contract on the day it was signed? Assume the signing bonus was paid today while the annual salaries are to be paid in lump amounts ½ year, 1½ years, 2½ years and 4 years later, and that money is worth 4% compounded semi-annually. Round the answer to the nearest $1,000 (i.e. $1,999,080.50 would be rounded to $1,999,000).

TSN reported that Kyle Lowry just signed a "four-year, $130 million deal" with the Toronto Raptors. The terms of the contract include a signing bonus of $5 million and salaries of $25 million, $28.5 million, $35 million, and $36.5 million in successive years of the contract. As you know, the media always misstates the "value" of sports contracts. What is the economic value of Kyle's contract on the day it was signed? Assume the signing bonus was paid today while the annual salaries are to be paid in lump amounts ½ year, 1½ years, 2½ years and 4 years later, and that money is worth 4% compounded semi-annually. Round the answer to the nearest $1,000 (i.e. $1,999,080.50 would be rounded to $1,999,000).

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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