5)You as the owner of the Los Angeles Dodgers are looking to sell a team-owned parking garage that runs adjacent to Dodgers Stadium. Company A offers you $2,000,000 right now for the parking garage. Company B offers you $2,050,000 for the parking garage but won't make the actual payment until two years from today. Assume that if you took Company A's offer, you would invest it for two years in a CD with 5% interest.

a.What is the future value (in two years' time with the 5% interest from the CD) of Company A's offer? (1 point)

b.What is the present value of Company B's offer, assuming 5% interest? (1 point)

c.Which company should you sell the parking garage to and why? (1 point)

6)This past year, your team made $80,000 in net revenue from concession sales. You decide to take 10% of that net revenue and invest it for 3 years with a guaranteed 7% annual return. What is the future value of the money you invested at the end of 3 years? (1 point)

7)You just signed your favorite player to a contract where $7 million of the contract is deferred compensation that will be paid at the end of 3 years. What is the present value of the deferred compensation if that player could earn a 5% annual return on his money if he would be paid right now and immediately invest that money? (1 point)

8)Your least favorite player on your favorite team is in the process of negotiating a buyout for the remainder of his contract. The owner and player agree to a one-time, lump sum buyout of $12 million. However, that money will not be paid to the player until 2 years from today. What is the present value of the buyout if that player could earn an 8% annual return on his money if he would be paid right now and immediately invest that money? (1 point)