Regine remembers that in 2015, Max Scherzer signed a 7-year deal with the Washington Nationals that was reported as $210m. This number grabbed headlines as pundits had predicted he would only be paid around $178m. However, the deal had a large amount of deferred compensation, with the entirety of his $35m per year salary in 2019-2021 deferred to 2022-2028. Assuming that his income is roughly $15m per year,2 and that the first payment was made today (t0), what was the actual PV of Scherzer's deal at the time of signing?

Answer rating: 100% (QA)

To calculate the present value PV of Max Scherzers deal at the time of signing we need to take into ... View the full answer