Show The Inputs To Solve For The Pv Of Each Contract

identify which contract you recommend the rookie

Question

Show the inputs to solve for the PV of each contract; identify which contract you recommend the rookie

accept?

PV of a Cash Flows Stream: A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 7%. He has been offered three possible 4-year contracts. Payments are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:

1 2 3 4

Contract 1: $3,000,000 $3,000,000 $3,000,000 $3,000,000

Finance