Question

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Future value. The Portland Stallions professional football team is looking at its future revenue stream from...

Future value. The Portland Stallions professional football team is looking at its future revenue stream from ticket sales. ​ Currently, a season package costs $300 per seat. The season ticket holders have been promised this same rate for the next four years. Five years from now the organization will raise season ticket prices based on the estimated inflation rate of 3​%. What will the season tickets sell for in five ​years?

$:

Solutions

Expert Solution

The amount is computed as shown below:

= current cost x (1 + inflation rate)n

= $ 300 x 1.035

= $ 347.78 Approximately


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