Question
A team signed a player to a 4-year, $18,871,956 contract to be paid out in the following way: Rate 8% Year Salary Bonus Benefit Total
A team signed a player to a 4-year, $18,871,956 contract to be paid out in the following way:
| Rate | 8% | |||
| Year | Salary | Bonus | Benefit | Total |
| 1 | $660,000 | $2,771,265 | $0 | $3,431,265 |
| 2 | $825,000 | $2,771,265 | $692,816 | $4,289,081 |
| 3 | $1,187,816 | $2,771,265 | $1,187,816 | $5,146,897 |
| 4 | $1,616,724 | $2,771,265 | $1,616,724 | $6,004,713 |
| $18,871,956 |
Assume that the annual payments will be made entirely on December 31 of the year shown. Using an annual interest rate of 8%, what is the Net Present Value (Jan1,2021) of their contract?
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Research On Professional Responsibility And Ethics In Accounting Volume 24
Authors: Charles Richard Baker
1st Edition
180071758X, 9781800717589
