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1. You just signed a multi-year contract as the quarterback of the returning San Diego Chargers. The San Diego Union Tribune claims that his contract
1. You just signed a multi-year contract as the quarterback of the returning San Diego Chargers. The San Diego Union Tribune claims that his contract is worth $29.5 million. Having taken an awesome finance class, you claim that this is not true in a present value sense and that you will really be making the following amounts at the end of the next five years: a) Assuming that you can make 7% on his investments, what is the present value of your contract? b) If you wanted to raise the nominal value of his contract to $32 million, while preserving the present value, how would you do it? (You can only adjust the signing bonus and the final year's cash-flow.)
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