Mike recently signed a professional basketball contract that will pay him the following amount for the next 5 years: One year from today: $13,000,000 Two years from today: $22,000,000 Three years from today: $38,000,000 Four years from today: $49,000,000 Five years from today: $26,000,000 If the current discount rate is 11%. What is the value of Mike's contract?

Answer rating: 100% (QA)

To calculate the present value of Mikes contract we need to discount each future cash flow back to t... View the full answer