Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. william brown, a professional athlete, currently h

William Brown, a professional athlete, currently has a contract that will pay him a large...

50.1K

Verified Solution

Question

Finance

William Brown, 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. William and his agent came up with a counteroffer.

Current contract.

Year 1

$ 7,092,00

Year 2

$ 3,645,00

Year 3

$ 2,512,00

Year 4

$ 1,693,00

Teams offer

Year 1

$ 3,475,08

Year 2

$ 3,827,25

Year 3

$ 3,567,04

Year 4

$ 3,639,95

Counteroffer.

Year 1

$ 4,609,80

Year 2

$ 7,545,15

Year 3

$ 3,366,08

Year 4

$ 2,607,220

a) What is the present values of Current Contract using a 14 percent discount rate? (Round to 2 decimals)

b) What is the present values of Team's Offer using a 14 percent discount rate? (Round 2 decimals)

c) What is the present values of Counteroffer using a 14 percent discount rate? (Round 2 decimals)

d) Which of the three contracts has the highest present value?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

2 2b 7b 12b 9b 27 2b 3 263 26 3 264 263 1267 15...

Medical Sciences
1.2K views

This is a list of some of the steps in the process of seeing a flash...

Programming
1.2K views

Why in Cipher Block Chaining (CBC) mode, an initialization vector is needed in addition to the...

Geometry
1.2K views

What is the measure of arc GF G F H 45 45 R

Basic Math
1.2K views

Perform the following multiplication and write the product in standard form. Express your result in...

Calculus
1.2K views

The Ettinsmoor Postal Service charges more for boxes whose combined length and girth exceeds 243...

Calculus
1.2K views

The energy E in J dissipated by a certain resistor after t seconds is given...

Accounting
1.2K views

Multiple Choice Question 53 It costs Sheridan Company $12...

Accounting
1.2K views

2. Prepare journal entries to record the events and transactions a through i. ...

Accounting
1.2K views

Please check for me this. Thank you Complete the Statement of Cash Flow matching

Finance
1.2K views

Please explain how you figured this out. Thank you. I appreciate it. I am having...

Accounting
1.2K views

Required: 1. Complete the table below to show the tax consequences If the business sells...