Question: Show your solution (using excel if possible) 2. Martin Fillmore is a big football star who has been offered contracts by two different teams. The

Show your solution (using excel if possible)

2. Martin Fillmore is a big football star who has been offered contracts by two different teams. The payments (in millions of dollars) he receives under the two contracts are listed below. Fillmore is committed to accepting the contract which provides him with the highest net present value (NPV). At what discount rate would he be indifferent between the two contracts?

Team A Team B

Year Cash Flow Cash Flow

0 $8.0 $2.5

1 4.0 4.0

2 4.0 4.0

3 4.0 8.0

4 4.0 8.0

10.85%
11.35%
16.49%
19.67%

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