The New York Yankees signed pitcher Masahiro Tanaka to a seven-year contract. Because Mr Tanaka was...
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The New York Yankees signed pitcher Masahiro Tanaka to a seven-year contract. Because Mr Tanaka was under contract in Japan with the Golden Eagles, the Yankees paid them $10,000,000 to release him. Mr Tanaka's contract calls for payments of $22,000,000 per year for six years and $25,000,000 in year seven. Assuming an 8 percent discount rate and that Mr Tanaka's salary is paid annually, starting 12 months after the fee paid the Golden Eagles, the present value of the Yankees' commitment, including the fee paid to the Golden Eagles, on the signing day of the contract is $. (Round your answer to two decimal places.) The New York Yankees signed pitcher Masahiro Tanaka to a seven-year contract. Because Mr Tanaka was under contract in Japan with the Golden Eagles, the Yankees paid them $10,000,000 to release him. Mr Tanaka's contract calls for payments of $22,000,000 per year for six years and $25,000,000 in year seven. Assuming an 8 percent discount rate and that Mr Tanaka's salary is paid annually, starting 12 months after the fee paid the Golden Eagles, the present value of the Yankees' commitment, including the fee paid to the Golden Eagles, on the signing day of the contract is $. (Round your answer to two decimal places.)
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First we need to calculate the present value of the 10000000 fee paid to the Golden Eagles ... View the full answer
Related Book For
Quantitative Analysis for Management
ISBN: 978-0133507331
12th edition
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Ha
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