Matt, a Star Basketball Player, Is Looking to Join a New

question 264

Multiple Choice

Matt, a star basketball player, is looking to join a new NBA team. The Bulls are offering him $24 million for one year. The Heat is offering him $10 million this year and $7.0 million in each of the next
Two years. The market interest rate is 5 percent. What is the present value of the offer from The
Heat in millions (rounded to the nearest one hundred thousand dollars) ?

• A) $22.5 million
• B) $23.0 million
• C) $24.0 million
• D) $25.2 million