Purchase Solution

Interest rate of quarterback income

Not what you're looking for?

Ask Custom Question

A famous quarterback just signed a $17 million contract providing $4.25 million a year for 4 years. A less famous receiver signed a $16 million 3-year contract providing $4 million now and $4 million a year for 3 years. Who is better paid? The interest rate is 8 percent.

Purchase this Solution

Solution Summary

The solution determines which famous quarterback is paid better when the interest rate is 8 percent.

Solution Preview

The present value of four year contract = 4.25/(1+8%)^1 + 4.25/(1+8%)^2 + ...

Purchase this Solution


Free BrainMass Quizzes
SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Basics of corporate finance

These questions will test you on your knowledge of finance.