Item$5$

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Item $5$

The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Filming is expected to take two years to complete. Each person signs independent contracts today with the following terms:

$$Contract TermsContract AmountPayment DateDerek$ $590,0002$ yearsIsabel$630,0003$ yearsMeredith$480,000$TodayGeorge$490,0001$ year

Required:

$1-$a$.$ Assuming an annual discount rate of $10\%,$ calculate the present value of the contract amount. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

$1-$b$.$ Which of the four actors is actually being paid the most?