Ch $05-$ Assignment $-$ Time Value of Money

$16.$ Application of Time Value of Money Skills

Colin Closer has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double$-$A $($AA$)-$level baseball team, the Dodge City Cowboys; last year, he was the first runner$-$up for the Minor League Player of the Year award. Using his $96mph$ fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a $16-3$ win$-$loss record, an earned run average $($ERA$)$ of $2\mathrm{.}98,$ and $146$ strikeouts in $117\mathrm{.}0$ innings pitched. He is also your best friend.

Two weeks ago, on his three$-$year anniversary with the team, Colin received the following email from his agent, George Get$-$d'Bucks, indicating that he is being called up to the Springfield Dusties, the Cowboys's corresponding Major League Baseball $($MLB$)$ team. Moreover, Colin's contract is being revised to reflect his new status. The email describes the general terms and conditions of Colin's revised contract.

From: George Get$-$d'Bucks

To: Colin Closer

Subject: New Team, New Contract Proposal

Colin,

Congratulations! You've been called up to the Springfield Dusties. Below are the offered terms and conditions of your new contract. After you review them and think about the offer, call me and we'll discuss your options. Congrats again!

Salary and Incentives: