Instructions-

Please use Excel and Assignment has an Appendix with extra information you will need to answer some questions.

- Part 1

Calculate the present value of the following contracts, for the day they were signed, using a discount rate of 11%.

Note that you will need to use the present value of a single payment equation for each year because even though there are multiple payments like an annuity, they are not equal payments, so the annuity equation will not work.

Contract information has been taken from Spotrac.com. You will be using this site later in the assignment, so take a moment to look at the website and find where I retrieved the information. If you search the players name, you will find a table. It shows the signing bonus on the very top line. It shows the base salary earned each year in the fourth column. Note that players with different contract lengths will have more or fewer rows. Find these two bits of data and compare them to what I have collected. You can ignore the rest.

Finish the tables to calculate the present value. The first steps have been completed for Parker. You are welcome to use the PV function on Excel, in which case you can skip column 2 calculating PVIF.

Brandon Parkers contract for the Raiders

Quandre Diggs contract for the Lions

Do you think it is accurate to use the same discount rate for both of these players? Why, why not? What factors do you think should be considered in a discount rate for an NFL contract?