You just signed your first pro contract. You got 3 million dollars in signing bonus and...

You just signed your first pro contract. You got 3 million dollars in signing bonus and will receive 1 million, 1.25 million, 1.5 million and 2 million dollars over the next 4 years. assuming an 11 perecent discount rate, what is the present value of your contract?

Expert Solution

Present value = 3m + 1m *(P/A,11%,4) + 0.25m*(P/G,11%,4) + 0.25m*(P/F,11%,4)

= 3m + 1m *3.102446 + 0.25m*4.250198 + 0.25m*0.658731

= 7.3297 m ~ 7.33 m

Rahul Sunny answered 2 years ago

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