Ch OS: Assignment - Time Value of Money 16. Application of Time Value of Money Skills Colin Closer has been playing baseball since he was five years old and has always dreamed of playing in the big bagues. Last season, he was a starting pitcher for a double A (AA)-kevel baseball team, the Ketchum Boldies; last year he was the first runner up for the Minor League Player of the Year award. Using this 96 mph Fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 16-J win-Loes record, an earned an average (ERA) of 2.98 and 146 strecut in 112.0 innings pitched. He is also your best friend. Two weeks ago, on his three year wiwersary with the team, Colin recived the following email from his agent, George Gord, indicating that he is being called up to the Paso Grandies, the Baldessceponding Major League oseball (MLD) team. Moreover, Colos contract is being revered to reflect his new status. The end describes the guiero terms and conditions of Cohe revised contract utory From Georg Get Buchs Tot Colin Close Subject New Team, New Contract Proposal Colin Congratulost You Bacalled us to the tries the end Cocording to George, the contract worth $3,758,400-ree of all possible Des Alter reading them wice ning of calle y tore them contract and verify Gergestations Medicoverat about what ne do with sound, you will have wreed that and received could be won... unde i UCH Ch 05: Assignment - Time Value of Money Colin Closer hereafter referred to as the "Player," is offered a four-year to reflect contract with an annual salary of $504,000 per year, to be paid at the end of Colin is each month in the contract term. and callid Under the league's collective bargaining agreement, the Player will receive a he'll do 4% cost-of-living adjustment (COLA) to his annual salary at the beginning of every other year. This means that the player's annual salary will increase at the beginning of year 2 and year 4, as applicable. . In addition, the Player will receive a one time $10,000 time-in-league bonus Cor after six months of participation with an MLB team. This bonus will be paid Nol immediately on completion of the six-month period. The Player is offered a performance-based bonus, as well as a milestone bonus. Both are intended to encourage outstanding performance The Player is offered the following award-based performance incentive: a 15% bonus if he is designated as the Most Valuable Player (MVP) in the league. The Player is also offered the following milestone bonus: a $100,000 bonus if he ties Nolan Ryan's 1973 single-season strikeout record (383 strikeouts) The Player is eligible for each potential bonus each year that the contract is in effect and, if expressed as a percentage, will be based on the value of the Player's base annual salary for the corresponding year. If carned, the performance and milestone bonuses will be distributed in a single payment at the beginning of the next contract vear. Although this proposal describes only one milestone, the actual contract contains several progressive milestones Colin C Exceeding one milestone creates the opportunity to exceed another A MindTap-Cengage Learning (2) Facebook Colin Closer Has Been Playing X Colin Coser Has Been Playing X m/staticb/udeva/index.html?deploymentid-593314234302424680013639528/58N9781337911009&snapshonid=2151746&id=10322322598 Dog for adoption Dog for adoption Dog for adoption Mason County Ani. CENGAGE | MINDTAP Ch 05. Assignment - Time Value of Money D 1 Assumptions and Calculated Values Wank Rate Information Calins Bank Account (compounded monthly 4 5 flective Alterest 7 Year 1 Vrata Year Year Total value Salary and then Teformation Salary(COLA 5 10 TOS Com AS 1 13 Chad TE O i E 35 5 6 8 7 00 R. T T U CENGAGE MINDTAP 15 Ch 05: Assignment - Time Value of Money Discount factor (based on Cell es above) Discounted Milestone Bonus 0.9513 0.9050 0.8610 0.8191 19 20 20 22 $ 0.9513 0.9050 0.8610 0.8191 Performance Bonus Discount factor (based on Cell B5 above) Discounted Performance Bonus 25 5 24 25 20 11.6812 11.1127 Monthly Endorsement Contract Payment Discount factor (based on Cell 4 above) Discounted Monthly Endorsement Payment 27 Contracts Total Nomi Value Contract's Total Discounted 1. Give your worksheet calculations, which of the following statement is accurate? Is Coco' imate of the value or con contract accurate on either a nominal or discounted basis? Check all that any It is appropriate and cesary to discount the performance bonus using the bank account's efective annual interest rate because of 1. Given your worksheet calculations, which of the following statements is accurate? Is George's estimate of the value of Colin's contract accurate on either a nominal or discounted basis? Check all that apply. It is appropriate and necessary to discount the performance bonus using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments for the performance bonus George's estimate of the nominal value of Colin's contract is correct. George's estimate of the value of Colin contract is increet on a nominal bases, and the croix 569,663 Related Question. The local car dealer creating Colin's endorse portunity can earn compounded quarterly) on his deposited funds. She would have to depots each Quarter, starting actly two years before they con contract, to fund her endorsement contract. (Note: The future values interest factor of Compounded quarterly for eight y pends 128. Ch OS: Assignment - Time Value of Money 16. Application of Time Value of Money Skills Colin Closer has been playing baseball since he was five years old and has always dreamed of playing in the big bagues. Last season, he was a starting pitcher for a double A (AA)-kevel baseball team, the Ketchum Boldies; last year he was the first runner up for the Minor League Player of the Year award. Using this 96 mph Fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 16-J win-Loes record, an earned an average (ERA) of 2.98 and 146 strecut in 112.0 innings pitched. He is also your best friend. Two weeks ago, on his three year wiwersary with the team, Colin recived the following email from his agent, George Gord, indicating that he is being called up to the Paso Grandies, the Baldessceponding Major League oseball (MLD) team. Moreover, Colos contract is being revered to reflect his new status. The end describes the guiero terms and conditions of Cohe revised contract utory From Georg Get Buchs Tot Colin Close Subject New Team, New Contract Proposal Colin Congratulost You Bacalled us to the tries the end Cocording to George, the contract worth $3,758,400-ree of all possible Des Alter reading them wice ning of calle y tore them contract and verify Gergestations Medicoverat about what ne do with sound, you will have wreed that and received could be won... unde i UCH Ch 05: Assignment - Time Value of Money Colin Closer hereafter referred to as the "Player," is offered a four-year to reflect contract with an annual salary of $504,000 per year, to be paid at the end of Colin is each month in the contract term. and callid Under the league's collective bargaining agreement, the Player will receive a he'll do 4% cost-of-living adjustment (COLA) to his annual salary at the beginning of every other year. This means that the player's annual salary will increase at the beginning of year 2 and year 4, as applicable. . In addition, the Player will receive a one time $10,000 time-in-league bonus Cor after six months of participation with an MLB team. This bonus will be paid Nol immediately on completion of the six-month period. The Player is offered a performance-based bonus, as well as a milestone bonus. Both are intended to encourage outstanding performance The Player is offered the following award-based performance incentive: a 15% bonus if he is designated as the Most Valuable Player (MVP) in the league. The Player is also offered the following milestone bonus: a $100,000 bonus if he ties Nolan Ryan's 1973 single-season strikeout record (383 strikeouts) The Player is eligible for each potential bonus each year that the contract is in effect and, if expressed as a percentage, will be based on the value of the Player's base annual salary for the corresponding year. If carned, the performance and milestone bonuses will be distributed in a single payment at the beginning of the next contract vear. Although this proposal describes only one milestone, the actual contract contains several progressive milestones Colin C Exceeding one milestone creates the opportunity to exceed another A MindTap-Cengage Learning (2) Facebook Colin Closer Has Been Playing X Colin Coser Has Been Playing X m/staticb/udeva/index.html?deploymentid-593314234302424680013639528/58N9781337911009&snapshonid=2151746&id=10322322598 Dog for adoption Dog for adoption Dog for adoption Mason County Ani. CENGAGE | MINDTAP Ch 05. Assignment - Time Value of Money D 1 Assumptions and Calculated Values Wank Rate Information Calins Bank Account (compounded monthly 4 5 flective Alterest 7 Year 1 Vrata Year Year Total value Salary and then Teformation Salary(COLA 5 10 TOS Com AS 1 13 Chad TE O i E 35 5 6 8 7 00 R. T T U CENGAGE MINDTAP 15 Ch 05: Assignment - Time Value of Money Discount factor (based on Cell es above) Discounted Milestone Bonus 0.9513 0.9050 0.8610 0.8191 19 20 20 22 $ 0.9513 0.9050 0.8610 0.8191 Performance Bonus Discount factor (based on Cell B5 above) Discounted Performance Bonus 25 5 24 25 20 11.6812 11.1127 Monthly Endorsement Contract Payment Discount factor (based on Cell 4 above) Discounted Monthly Endorsement Payment 27 Contracts Total Nomi Value Contract's Total Discounted 1. Give your worksheet calculations, which of the following statement is accurate? Is Coco' imate of the value or con contract accurate on either a nominal or discounted basis? Check all that any It is appropriate and cesary to discount the performance bonus using the bank account's efective annual interest rate because of 1. Given your worksheet calculations, which of the following statements is accurate? Is George's estimate of the value of Colin's contract accurate on either a nominal or discounted basis? Check all that apply. It is appropriate and necessary to discount the performance bonus using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments for the performance bonus George's estimate of the nominal value of Colin's contract is correct. George's estimate of the value of Colin contract is increet on a nominal bases, and the croix 569,663 Related Question. The local car dealer creating Colin's endorse portunity can earn compounded quarterly) on his deposited funds. She would have to depots each Quarter, starting actly two years before they con contract, to fund her endorsement contract. (Note: The future values interest factor of Compounded quarterly for eight y pends 128