Just before the start of a recent season, the Toronto Maple Leafs announced the long-term signing of
Question:
Just before the start of a recent season, the Toronto Maple Leafs announced the long-term signing of Mitch Marner, one of their top players. The news clipping excerpt from the Toronto Star, below, contains details (in bold) of the contract salary payments. If you assume the contract starts today and the Maple Leafs expect to earn 2.5% if they invested their money elsewhere, how much is Marner’s contract really worth at the time of signing?
Marner was signed to a contract totalling $22 million, which includes an $4 million signing bonus payable over the first two years of the contract. His combined salary & bonus will be $3.5 million in year one, $5 million in year two and three, $4.1 million in year four and $4.4 million in the final year of the deal. (The Star)
Expert Answer:
Note PF factor has been considered upto 3 decimal places Net Present Value Presen... View the full answer
