The following actual contracts signed by athletes:

a. $28,350,000 contract, payable at $2,025,000 per year for 14 years.

b. $31,800,000 contract, payable at $1,590,000 per year for 20 years.

c. $25,000,000 contract, payable at $2,500,000 per year for 10 years.

Determine the present value of each contract and indicate (with explanation) which contract you would prefer to have. Assume a 9% interest rate.

Answer rating: 100% (QA)

SOLUTION To determine the present value of each contract we can use the formula for the present valu... View the full answer