Case Study: Matthew Bart, All American Matthew Bart had been nominated as the second runner up for the Heisman Trophy in his senior year at a major Midwestern university. Only outstanding athletes get the trophy and it is presented annually by the New York Athletic Club. Bart has had impressive achievements throughout his involvement in college football. Bart had run for over 1,550 yards, scored 19 touchdowns, caught 44 passes coming out of the backfield and his time in running the 40-yard dash, which professional scouts consider to be extremely important, was 4.58 seconds. He was also voted second team All American by the Associated Press and was a first team All American in the Coaches Poll selections. Bart is inspired to become a professional football player after college and has received a few proposals for his services. In the first round of the National Football League, he had been drafted as the five players out of thousands of college football players that were eligible for that year. There are currently four professional football clubs that are interested in recruiting Bart as their long-term contracted player. The proposal from each club is presented below: Professional football club 1's offer: $800,000 immediate signing bonus $900,000 at the end of each year for the next five years Professional football club 2's offer: $500,000 immediate signing bonus $1,000,000 at the end of each year for the next three years $1,100,000 a year at the end of year 4 and year 5 Professional football club 3's offer: No immediate signing bonus $1,000,000 at the beginning of each year for the next five years. Professional football club 4's offer: $150,000 immediate signing bonus $90,000 at the end of each month for the next five years. Required to: 1. Calculate the present value of EACH of the offer AND rank them in order of preference for Matthew Bart, ranging from the best to the worst option, assuming a discount rate of 12 percent. (30 marks) 2. Explain how the concept of "time value of money" helps you in determining the best option for Bart. (6 marks) 3. Explain if your ranking in Q1 would be different if you calculate future value of the payments instead of the present value. (5 marks) 4. Explain the role of discount rate in calculating the present value of the offers made to Bart. (5 marks) 5. Besides present value of the offers, discuss other factors that Bart should consider before finalising his option in choosing the best offer for his career. (5 marks) 6. Report presentation: Prepare the report with acceptable usage of grammar, language and style, and include all workings and formula. (4 marks)