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

Next > < Previous

Related Solutions

AMC has just signed a contract. The contract requires an initial investment of $5 million, and...

AMC has just signed a contract. The contract requires an initial investment of $5 million, and creates positive cash flows of $2 million one year from today, $1.5 million two years from today, and $2.5 million three years from today. What is the value of this contract AMC can earn 9 percent on its money?

Jason just signed a $6 million 3 year contract with the patriots. The contract calls for...

Jason just signed a $6 million 3 year contract with the patriots. The contract calls for a payment of $3 million 1 year from today, $2 million 2 years from today and $1 million 3 years from today, what is the contract really worth as of today if he can earn 10% apr on his money (assume annual compounding).

A famous quarterback just signed a $14 million contract providing $3.5 million a year for 4...

A famous quarterback just signed a $14 million contract providing $3.5 million a year for 4 years. A less famous receiver signed a $10.6 million 4-year contract providing $3 million now and $3.2 million a year for 4 years. The interest rate is 8%. a. What is the PV of the quarterback's contract? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What is the PV of the receiver's contract? (Do not round...

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?

In February 20X3, La Fondue Ltd. signed a two-year contract with a Quebec cheese supplier to provide a minimum of 1,000 kilograms

In February 20X3, La Fondue Ltd. signed a two-year contract with a Quebec cheese supplier to provide a minimum of 1,000 kilograms of fine cheese for fondue at a fixed price of $20 per kilogram. By the end of September, La Fondue had purchased 650 kg at the agreed-upon price. By the end of October, the end of the fiscal year, the open market price of the cheese dropped to $17 per kg due to excess capacity in the dairy...

In 2018, a football player signed a contract reported to be worth $75.3 million. The contract...

In 2018, a football player signed a contract reported to be worth $75.3 million. The contract was to be paid as $10.7 million in 2018, $11.7 million in 2019, $13.1 million in 2020, $13.2 million in 2021, $13.2 million in 2022, and $13.4 million in 2023. If the appropriate interest rate is 8 percent, what kind of deal did the player snag? Assume all payments are paid at the end of the year. (Do not round intermediate calculations and enter...

In 2015, a baseball player signed a contract reported to be worth $98.5 million. The contract...

In 2015, a baseball player signed a contract reported to be worth $98.5 million. The contract was to be paid as $14.7 million in 2015, $14.9 million in 2016, $17.1 million in 2017, $17.2 million in 2018, $17.2 million in 2019, and $17.4 million in 2020. If the appropriate interest rate is 9 percent, what kind of deal did the player snag? Assume all payments are paid at the end of the year. (Enter your answer in dollars, not millions...

Question 5 A U.S. company is to sign a contract for 16 million HK dollars (HKD)...

Question 5 A U.S. company is to sign a contract for 16 million HK dollars (HKD) that will be paid shortly in the future. Given the current exchange rate of HKD4.0 per U.S. dollar, this amount is consistent with the company’s target of 4 million U.S. dollars for its services. Assume it is July and that the contract amount will be paid on 30 September. The following September option quotes are available in the market today to help hedge against...

Question 5 A U.S. company is to sign a contract for 16 million HK dollars (HKD)...

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 $ 540,000 2 years Isabel 580,000 3 years Meredith 450,000 Today George 440,000 1 year Required: 1-a. Assuming an annual discount rate of 9%, calculate the present value of the contract amount. (FV of $1, PV of $1, FVA of $1, and PVA of...

Subjects