Question

In: Finance

Jalen Ramsey Star Cornerback on the LA Rams signed a 5 year, $105 Million Dollars Contract...

Jalen Ramsey Star Cornerback on the LA Rams signed a 5 year, $105 Million Dollars Contract

1. Using A discount Rate of 2% find out his cash flow (show in Excel)

2. Using a discount rate of 5% find out his cash flow (show in excel)

3. What does this tell you about his contract?

Solutions

Expert Solution

PV = $105,000,000

N = 5

FV = 0

We use the excel function PMT to find out his cash flow.

Screenshot with formulas

1. Using a 2% discount rate, the cash flow each year is $22,276,631

2. Using a 5% discount rate, the cash flow each year is $24,252,354

3. This tells us that at a higher discount rate the cash flow each year is higher.

jeff jeffy answered 1 year ago
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