1. Given your worksheet calculations, which of the following statements is accurate? Is Michaels estimate of the value of Colins contract accurate on either a nominal or discounted basis? Check all that apply.

- Michaels estimate of the value of Colins contract is incorrect on a nominal basis, and the error is $50,389.

- It is appropriate and necessary to discount the performance bonus using the bank accounts effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments for the performance bonus.

- Michaels estimate of the nominal value of Colins contract is correct.

2. Related Question: The local car dealer creating Colin's endorsement opportunity can earn 6% (compounded quarterly) on his deposited funds. She would have to deposit _______ each quarter, starting exactly two years before the day Colin signs his contract, to fund her endorsement contract. [Note: The future value interest factor of 6% compounded quarterly for eight quarterly periods is 8.4328.]