A Star Basketball Player Signs a Contract That Newspaper Reports

question 16

Multiple Choice

A star basketball player signs a contract that newspaper reports say is worth $20 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth

• A) $20 million as reported in the papers.
• B) less than $20 million since the present value of $5 million received one or more years from now is less than $5 million.
• C) more than $20 million because the present value of $5 million received one or more years from now is more than $5 million.
• D) either more or less than $20 million, depending on the value of the discount rate.

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Definitions:

Incorrect Rejection

The incorrect dismissal of a true result or hypothesis, often occurring in the context of experimental studies or statistical analysis.

Match-To-Culprit Approach

A forensic method where potential suspects are compared to available evidence, particularly in the context of eyewitness identifications.

Mistaken Identifications

A cognitive error where an individual incorrectly identifies a person or object as being someone or something they are not.

Physical Description

A detailed account or representation of the appearance and characteristics of a person, place, or thing.