1. In looking at my calculations in this hypothetical case, I have concluded that the athlete whose contract was the better deal was the individual who received a deal with equal installments. The equal installments over the 10 years is a better deal for an athlete then the contract that will pay $100 million in installments with the installments increasing 5% per year. This is due to the fact that the contract with equal installments has a better time-value of money. To solve this problem we need to find the athlete who maximizes the present value of the amount signed in the 10-year contract of $100 million dollars. The present value=future value/(1+r)n. In the first contract the athlete receives $100 million in 10 equal installments. Therefore, there will be $10 million paid to the athlete every year. …show more content…
The annuity present value would be PV=C{1-[1/(1/1+r)2]}/r. To speed things up as taught in our lesson, one can turn to page 364 to find the Annuity Present Value factor. Since the period is over 10 years and we are plugging in 10% for both contracts, the Annuity PV Factor would equal 6.1446. If we wanted to stick with the initial formula for the first contract, we would say C=10,000,000. Therefore, C x {1-[1/(1.1)10]}/.1. This gets messy, so we should go back to the shortcut as described in our lecture. The Annuity PV Factor is 6.1446. the Annuity PV=$10 million times 6.1446. This would result in 61.446 million dollars. The second contract stipulates that 100 million will be paid in 10 installments, but the installments will increase 5% per year. In doing math we find should let x be the first installment in year one. Therefore, x(1+1.051+1.052+1.053+1.054+1.055+1.056+1.057+1.058+1.059)=100 million. In plugging in the formula, you would divide 100 by the parenthesis to separate x. X would result in
14. Global Enterprises has just signed a $3 million contract. The contract calls for a payment of $.5 million today, $.9 million one year from today, and $1.6 million two years from today. What is this contract really worth if Global Enterprises can earn 12 percent on its money?
(a) In this question, two new payment alternatives have been mentioned. The first option (Payment B) consists of seven equal payments of $3,000 at the beginning of each year; this can be
Throughout the world of sports, it is very common for athletes to get injured or bruised up. A lot of the injuries that athletes suffer from often require surgery and intense rehab. Many kids are stuck with paying the medical bill and have no insurance to cover it. The worst part about all of this is that most college coaches end up taking away the player's scholarship because of an injury. The NCAA has its own catastrophic injury insurance, which insures individual athletes up to $20 million. But the majority don’t qualify. This example just shows that most athletes don’t have enough money to get insurance which would help them with their injury. As a result for the players not having insurance, the coaches will end up taking away their scholarship.
My real life situation is based on drug scandal in sports. Daniel Spencer Tonks, a former England Under16 rugby union player, tested positive for the steroid stanozolol in February. The first British rugby player given a four year ban for taking steroids says doping in the sport is widespread."There is a lot of pressure on players to be bigger, faster and stronger as they are the players who get picked,” "I wouldn't say it was coaches saying you should take something, more the fact the players want to be the best at their sport.” he said.
It’s the only time of year when one shot can make or break a team’s season. It’s the only time of year when athletes can be magnified into stars or heros. Millions of eyes witness every heart-breaking upset and every game-saving buzzer beater. It’s March and it’s madness. The National College Athletics Association (NCAA) makes "$6 billion annually and $1 billion just off of the men’s basketball tournament” (USNEWS). In 2013, the Louisville Cardinals faced the Duke Blue Devils in the Mid-West Regional Championship. Louisville, the tournament’s one seed, looked to be moving on to the final four when a freak accident slowed everything. Late in the game, sophomore Kevin Ware of the Cardinals leaped to contest a 3 point shot. While everyone in
9.1 Confidentiality. The Player agrees that during the Player’s employment with the Company and thereafter, the Player shall comply with the Company’s policies and procedures, including any and all policies regarding the preservation of Company’s and its sponsors Confidential Information. Player acknowledges his or her continuing obligations to preserve the Company’s Confidential and Proprietary Information and agrees that Player will not use or disclose any confidential or proprietary information of the Company without prior written authorization from a duly authorized representative of the Company. Player further agrees that he or she will be expected not to use or disclose any confidential information, including trade secrets, of any former
In this week’s forum post we were asked to elaborate on a situation of that occurred during a little ledge baseball game. The overall scope of the game as a whole is some that need to be address to the parents. The players parents enter the law frim asking for legal advice pertaining to the incident in question. The first thing that needs to be looked at are all the factor that encompass the incident as a whole. The first thing that need to be looked at is the fact is direction of little jimmy and who he is. The first thing that need to be look at is the fact that Little Jimmy is an exchange student which opens a gray area as far as liability to the parent that are involved in the situation “The exchange student’s natural parents remain legal
What makes me different from many other athlete? My high determination, effort, and my motivation is makes me different. Every since I started playing football I have always been determined to be the best I can be. I always have been one the last person to leave practice, because I work with underclassmen on technique to help get them better along with myself. I always try to find ways to get better as person and as a athlete.
Using a 10 percent discount rate, the net present value of all benefits is $1,645,201.46; the net present value of all costs is $1,576,173.19; the overall net present value is $69,028.27, and the project breaks even in approximately 4.04 years.
Free labor in exchange for sheep skin; generate millions while earning a degree. The topic of compensating collegiate athletes has long been the elephant in the room pertaining to division one athletes. Compensating collegiate athletes for their athletic contribution to their respective university has been an issue from the early 1800’s, when Harvard and Yale were competing in a regatta, and Harvard used a gentleman who did not attend the institution to compete to appease Elkins Railroad who sponsored the regatta. By the late 1800’s and early 1900’s football became a very popular sport that fans loved, but was very violent causing forty – five deaths amongst collegiate football players. This urged the President at that time Theodore Roosevelt
B. Suppose you have two bank accounts, one called Account A and another Account B. Account A will be worth $6,500.00 in one year. Account B will be worth $12,600.00 in two years. Both accounts earn 6% interest. What is the present value of each of these accounts?
It is all fun and games until someone gets hurt. Many athletes, are being diagnosed with Amyotrophic Lateral Sclerosis that takes control of the body. Others show symptoms of Chronic Traumatic Encephalopathy causing many to forget love ones. Theses types of diseases are attacking middle age men, who are involved in a sport. Today, sport’s programs just don't put enough care to the player, only to the performance that brings the profit. Any athlete can get a concussion at a game. Games are giving athletes head trauma that affects the brain, causing them to be in danger in the future. Athletes are dying and if changing the rules, even if it changes the game can save lives.
14. You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug's profits will be $2 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 10% per year?
1. Assume that at retirement you have accumulated $825,000 in a variable annuity contract. The assumed investment return is 5.5% and your life expectancy is 18 years. What is the hypothetical constant benefit payment?
9 Seeds have 20-1 odds to win the world series (or a 0.05%) but there's still a chance.