Calculating Annuity Values an All-Pro defensive lineman is in contract negotiations. The team has offered the following
Question:
Calculating Annuity Values an All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure: All salaries are to be paid in lump sums. The player has asked you as his agent to renegotiate the terms. He wants a $9 million signing bonus payable today and a contract value increase of $750,000. He also wants an equal salary paid every three months, with the first paycheck three months from now. If the interest rate is 5.5 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year.
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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To find the quarterly salary for the player we first need to find the PV of the current contract The ...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan
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