1. Application of Time Value of Money Skills a Aa As the son of a Major League Baseball (MLB) player, Henry Homerun-King has been playing baseball since he was old enough to hold a bat, and he has always dreamed of following in his father's footsteps. For the past four years, he's been the starting center fielder for the Moab Mountain Goats, a double-A (AA)-level baseball team. Last year, based on his outstanding fielding and hitting record, including 122 runs batted in (RBI) and 31 home runs, he was selected to receive the Minor League Player of the Year award Michael Make-d'Team, Henry learned that he's being called up to the big leagues a Yesterday, in a telephone conversation with his agent, nd traded to the Springfield Dusties! In fact, he's supposed to report to the coach of the Dusties next Monday. To add another source of change to his world, Henry and Michael must negotiate a new contract with Elijah Stone, the general manager of the Dusties. Henry and Michael are having a prenegotiation conversation Michael Henry, we need to review and agree on the numbers and provisions that I'm going to propose to Elijah later this afternoon Henry Cool! I am so excited! I checked the league standings this morning, and the Dusties are currently in second place in the league. My dad said that they are on fire so far this season, and if they can continue their current level of performance, they-no, I mean we-could qualify for the playoffs by mid-September. Wouldn't that be incredible? Michael Yeah, kid, it would. But let's focus on today's contract negotiations. I want your input, so let's run down my list of thoughts, and then we can talk about your move and your transition to Springfield. Henry Ok, what's on your list? B s minimum player salary of $414 00 hi First, I'm proposing a three-year salary equal to 15% greater than the annual salary to $476,100 per year for each of the next three years. My rationale is that if you do really well during the next three years, then we can renegotiate your contract sooner and go for the really big bucks in three-rather than in four or five-years. Michael sho uld pri ng your Remember that you will be paid at the end of each month, and don't worry about the effect of taxes at this stage of the deal. We'll worry about your federal and state taxes once we meet with your financial planner So now, let's think about the other terms of your contract. I'm thinking that we propose an allowance of $7,500 to pay for your moving expenses, to be paid when the contract is signed, a signing bonus of $15,000, and a performance bonus. I've also lined up your first endorsement contract for you Henry Great! But two quick questions. First, when would the signing bonus be paid? Second, what type of performance bonus are you thinking ahout? 1. Application of Time Value of Money Skills a Aa As the son of a Major League Baseball (MLB) player, Henry Homerun-King has been playing baseball since he was old enough to hold a bat, and he has always dreamed of following in his father's footsteps. For the past four years, he's been the starting center fielder for the Moab Mountain Goats, a double-A (AA)-level baseball team. Last year, based on his outstanding fielding and hitting record, including 122 runs batted in (RBI) and 31 home runs, he was selected to receive the Minor League Player of the Year award Michael Make-d'Team, Henry learned that he's being called up to the big leagues a Yesterday, in a telephone conversation with his agent, nd traded to the Springfield Dusties! In fact, he's supposed to report to the coach of the Dusties next Monday. To add another source of change to his world, Henry and Michael must negotiate a new contract with Elijah Stone, the general manager of the Dusties. Henry and Michael are having a prenegotiation conversation Michael Henry, we need to review and agree on the numbers and provisions that I'm going to propose to Elijah later this afternoon Henry Cool! I am so excited! I checked the league standings this morning, and the Dusties are currently in second place in the league. My dad said that they are on fire so far this season, and if they can continue their current level of performance, they-no, I mean we-could qualify for the playoffs by mid-September. Wouldn't that be incredible? Michael Yeah, kid, it would. But let's focus on today's contract negotiations. I want your input, so let's run down my list of thoughts, and then we can talk about your move and your transition to Springfield. Henry Ok, what's on your list? B s minimum player salary of $414 00 hi First, I'm proposing a three-year salary equal to 15% greater than the annual salary to $476,100 per year for each of the next three years. My rationale is that if you do really well during the next three years, then we can renegotiate your contract sooner and go for the really big bucks in three-rather than in four or five-years. Michael sho uld pri ng your Remember that you will be paid at the end of each month, and don't worry about the effect of taxes at this stage of the deal. We'll worry about your federal and state taxes once we meet with your financial planner So now, let's think about the other terms of your contract. I'm thinking that we propose an allowance of $7,500 to pay for your moving expenses, to be paid when the contract is signed, a signing bonus of $15,000, and a performance bonus. I've also lined up your first endorsement contract for you Henry Great! But two quick questions. First, when would the signing bonus be paid? Second, what type of performance bonus are you thinking ahout
