1) A football player has the following new contracts options. All are guaranteed. If the discount...

A football player has the following new contracts options. All are guaranteed. If the discount rate is 7% how much is each worth today? Which do you think is the best option? Why?

A yearly contract for $10 million per year for each of the next 4 years.
A yearly contract for $5 million per year for each of the next 8 years.
A yearly contract which pays $5 million the first year, $10 million the second year, $20 million the third year, and $15 million the fourth year.
A back-loaded contract of $45 million paid at the end of 4 years.
A back-loaded contract of $55 million paid at the end of 8 years.
A front-loaded contract of $35 million paid today.

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jeff jeffy answered 7 months ago

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