The four actors below have just signed a contract to star in a dramatic movie about...

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:

	Contract Terms
	Contract Amount		Payment Date
Derek	$	580,000	2 years
Isabel		620,000	3 years
Meredith		490,000	Today
George		480,000	1 year

Required:
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) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.)

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Expert Solution

Contract Terms
	Contract Amount	Payment Date	PV Factor @ 8%	Present Value
Derek	5,80,000	2 years	0.85734	4,97,257.20
Isabel	6,20,000	3 years	0.79383	4,92,174.60
Meredith	4,90,000	Today	1	4,90,000.00
George	4,80,000	1 year	0.92593	4,44,444.00

ekkarill92 answered 1 year ago

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