Question: Determine Present Value A basketball player has just signed a $30 million contract to play for three years. She will receive $5 million as an

Determine Present Value

A basketball player has just signed a $30 million contract to play for three years. She will receive $5 million as an immediate cash bonus, $5 million at the end of the first year, $8 million at the end of the second year, and the remaining $12 million at the end of the contract.

Assuming a discount rate of 10 percent, what is the value of the package?

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