(Solution Library) on page 57 PV of a cash flow stream A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 10 percent. He
Question: 20 on page 57
PV of a cash flow stream A rookie quarterback is negotiating his first NFL contract.
His opportunity cost is 10 percent. He has been offered three possible 4-year contracts.
Payments are guaranteed, and they would be made at the end of each year. Terms of
each contract are listed below:
| 1 | 2 | 3 | 4 | |
|
Contract 1
Contract 2 Contract 3 |
$3,000,000
$2,000,000 $7,000,000 |
$3,000,000
$3,000,000 $1,000,000 |
$3,000,000
$4,000,000 $1,000,000 |
$3,000,000
$5,000,000 $1,000,000 |
Price: $2.99
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