6. The newspaper headline states "Baseball Player Signs for $14 Millions." A reading of the article revealed that the player will receive $1 Million per year for the next 6 years. He will then receive $400,000 per year for 20 years (i.e.: 6$1,000,000+20$400,000= funds at 10% per year, what is the present value of this contract? Contract: 1 million for 6 years and then 0.4 millions for the next 20 years. This is the same as 0.6 million for 6 years plus 0.4 million for 26 years. The rate of return is 10%. PV=i=16(1.10)i1,000,000+i=126(1.10)i400,000 or, rewriting the equation to make it more calculator friendly: PV=i=16(1.10)i600,000+i=126(1.10)i400,000 Answer: The present value of this contract is $6,277,534.61