A football club is negotiating with Alex (professional football player) to join and presented two offers Offer 1: Pay him a big bonus on the signing day of the contractand smaller payments in the future Offer 2: A small amount now and bigger payments in the future.

1. Which option should Alex accept and why?
2. What about the Club, which option is better for them?

A company wants to sell an electrical generator for $165,000 in 2024. The price of this generator in the market today is $94,000 (according to GE company who is the producer of this generator). If the discount rate on this generator is 9.5 percent per year.

1. Do you think the firm will make a profit if they sell this generator?
2. What is the rate that will make the firm break-even?

Note: Profit = Revenue -cost