6. 6.

Present value [LO 6.1] Suppose two athletes each sign 10-year contracts for $80 million. In one case, we are told that the $80 million will be paid in 10 equal instalments. In the other case, we are told that the $80 million will be paid in 10 instalments, but the instalments will increase by 5 per cent per year. Who got the better deal?