Question: An MLB baseball player is offered a five - year contract in the payment schedule as follows: Year 0 $ 2 , 0 0 0
An MLB baseball player is offered a fiveyear contract in the payment schedule as follows:
Year
$ signing bonus
$
$
$
$
$
A Tabulate the original pay schedule. Assume the interest rate is What is present value of his contract? Hint: NPV function
B The player wants to see his paycheck increase each year. That is his Year s pay must be higher than his newly designed signing bonus, and Year s pay is higher than Year s pay and so on If you are the manager of the team, how should you rearrange his payment schedule that can simultaneously satisfy the players demand and keep the cost of the contract the same, that is the PV being the same? Tabulate the new payment schedule and compute the PV
Note:
You must specify the input data
The output answers must contain Excel functions by referring to the input data, not directly entering numbers to compute the answer.
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