Solve Each of the Following Independent Cases Using the Present

question 78

Essay

Solve each of the following independent cases using the present value tables.
The following are actual contracts signed by athletes:
a.$25,000,000 contract,payable at $2,500,000 per year for 10 years.
b.$25,000,000 contract,payable at $1,000,000 per year for 25 years.
c.$25,000,000 contract,payable at $1,562,500 per year for 16 years.
Determine the present value of each contract and indicate which contract you would prefer to have.Assume a 12% interest rate.

---

Definitions:

Anatomically Modern

Describes humans who share the same range of physical characteristics as contemporary humans, typically relating to Homo sapiens species.

Homo Sapiens

The scientific name for modern humans, characterized by their ability for complex language and social structures.

Consciously Design Tools

The intentional creation or modification of tools or devices through thoughtful planning and creative thought, often to solve a specific problem.

Homo Habilis

Oldest known species in genus Homo; lived in Africa from approximately 2.5 to 1.6 mya.