Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. Note: To darity possible sources of confusion and simplify your calculations; Assume that all bonuses are earned in each of the years for which they are available and are paid at the end of the corresponding year(s), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonuses were earned The endorsement proceeds are paid in accordance with the terms of the deal. . Remember that the timing of a cash flow affects the interest rate that is used to discount the cash flow. For example, annual interest rates should be used to discount annual cash flows, and monthly interest rates are used to discount monthly cash flows. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation . Round all dollar amounts to the nearest whole dollar and carry out all interest rate factors to four decimal places. . When entering intermediate values as answer choices, be sure to round them to the nearest dollar, however when using those same values to calculate another answer, do not round: A B D 1 2 3 Assumptions and Calculated Values Bank Rate Information: Flynn's Bank Account Rate (compounded monthly) Monthly Bank Rate Effective Annual Interest Rate 96 4 % 5 % 6 7 Year 1 Year 2 Year 3 Year 4 Total value 9 Salary and Bonus Information: Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 10 11.4958 10.6148 9.8013 9.0501 11 12 13 14 0.9609 Time-in-League Bonus Discount factor (based on Cell B4 above) Discounted Time-in-League Bonus 15 16 17 18 0.9234 0.8526 0.7523 0.7269 Milestone Bonus Discount factor (based on Celles above) Discounted Milestone Bonus 19 20 21 Performance Bonus Discount factor (based on Cell 65 0.9234 0.8526 0.7823 22 0.7269 22 0.9234 0.8526 0.7873 0.7269 Discount factor (based on Cell B5 above) Discounted Performance Bonus 23 24 25 26 11.4958 10.6148 Monthly Endorsement Contract Payment Discount factor (based on Cell 34 above) Discounted Monthly Endorsement Payment 27 28 29 Contract's Total Nominal Value Contract's Total Discounted Value 30 16. Application of Time Value of Money Skills Flynn Fireballer has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double-A (AA)-level baseball team, the Ketchum Baldies; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 99 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 18-2 win-loss record, an earned run average (ERA) of 2.23, and 166 strikeouts in 147.2 Innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Flynn received the following email from his agent, George Get-d'Bucks, indicating that he is being called up to the El Paso Grandies, the Baldies's corresponding Major League Baseball (MLB) team. Moreover, Flynn's contract is being revised to reflect his new status. The email describes the general terms and conditions of Flynn's revised contract From: George Get-d'Bucks To: Flynn Fireballer Subject: New Team, New Contract Proposal Flynn, Conaratulations! You've been called up to the El Paso Grandies. Below are the offered Flynn is so excited according to George, the contract is worth $2,264,400-assuming receipt of all possible bonuses. After reading the email twice and calling his family, Flynn called you to review the terms of the contract and verify George's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Flynt have agreed that any runds received could be invested to cam 8.00%, compounded montni Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related question Note: To clarity possible sources of contusion and simplify your calculations Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. Note: To darity possible sources of confusion and simplify your calculations; Assume that all bonuses are earned in each of the years for which they are available and are paid at the end of the corresponding year(s), unless specifically stated differently. Their value should be based on the salary in effect at the time the bonuses were earned The endorsement proceeds are paid in accordance with the terms of the deal. . Remember that the timing of a cash flow affects the interest rate that is used to discount the cash flow. For example, annual interest rates should be used to discount annual cash flows, and monthly interest rates are used to discount monthly cash flows. Therefore, it may be necessary to compute the appropriate interest rate that should be used in a discounting calculation . Round all dollar amounts to the nearest whole dollar and carry out all interest rate factors to four decimal places. . When entering intermediate values as answer choices, be sure to round them to the nearest dollar, however when using those same values to calculate another answer, do not round: A B D 1 2 3 Assumptions and Calculated Values Bank Rate Information: Flynn's Bank Account Rate (compounded monthly) Monthly Bank Rate Effective Annual Interest Rate 96 4 % 5 % 6 7 Year 1 Year 2 Year 3 Year 4 Total value 9 Salary and Bonus Information: Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 10 11.4958 10.6148 9.8013 9.0501 11 12 13 14 0.9609 Time-in-League Bonus Discount factor (based on Cell B4 above) Discounted Time-in-League Bonus 15 16 17 18 0.9234 0.8526 0.7523 0.7269 Milestone Bonus Discount factor (based on Celles above) Discounted Milestone Bonus 19 20 21 Performance Bonus Discount factor (based on Cell 65 0.9234 0.8526 0.7823 22 0.7269 22 0.9234 0.8526 0.7873 0.7269 Discount factor (based on Cell B5 above) Discounted Performance Bonus 23 24 25 26 11.4958 10.6148 Monthly Endorsement Contract Payment Discount factor (based on Cell 34 above) Discounted Monthly Endorsement Payment 27 28 29 Contract's Total Nominal Value Contract's Total Discounted Value 30 16. Application of Time Value of Money Skills Flynn Fireballer has been playing baseball since he was five years old and has always dreamed of playing in the big leagues. Last season, he was a starting pitcher for a double-A (AA)-level baseball team, the Ketchum Baldies; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 99 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 18-2 win-loss record, an earned run average (ERA) of 2.23, and 166 strikeouts in 147.2 Innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Flynn received the following email from his agent, George Get-d'Bucks, indicating that he is being called up to the El Paso Grandies, the Baldies's corresponding Major League Baseball (MLB) team. Moreover, Flynn's contract is being revised to reflect his new status. The email describes the general terms and conditions of Flynn's revised contract From: George Get-d'Bucks To: Flynn Fireballer Subject: New Team, New Contract Proposal Flynn, Conaratulations! You've been called up to the El Paso Grandies. Below are the offered Flynn is so excited according to George, the contract is worth $2,264,400-assuming receipt of all possible bonuses. After reading the email twice and calling his family, Flynn called you to review the terms of the contract and verify George's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Flynt have agreed that any runds received could be invested to cam 8.00%, compounded montni Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related question Note: To clarity possible sources of contusion and simplify your calculations