Purchase Solution

# PV of the quarterback

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A famous receiver just signed a \$10.4 million contract providing \$2.6 million a year for 4 years. A less famous receiver signed a \$9.4 million 4-year contract providing \$3 million now and \$1.6 million a year for 4 years. The interest rate is 8%.

a. Calculate the PV of the quarterback. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Present value= _______________ million

b. Calculate the PV of the receiver. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Present value = _________________ million

c. Who is better paid?

Quarterback

##### Solution Summary

The solution discusses PV of the quarterback. PV of the receivers are given.

##### Solution Preview

A famous receiver just signed a \$10.4 million contract providing \$2.6 million a year for 4 years. A less famous receiver signed a \$9.4 million 4-year contract providing \$3 million now and \$1.6 million a year for 4 years. The interest rate is ...

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