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Exercise 5-5 (Algo) Present value; single amount (LO 5-3) The four actors below have just signed a contract to star in a dramatic movie
Exercise 5-5 (Algo) Present value; single amount (LO 5-3) The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital- expected to take two years to complete. Each person signs independent contracts today with the following terms Contract Terms Contract Amount Payment Date Derek Isabel Meredith George Required: $ 450,000 2 years 490,000 3 years Today 350,000 1 year 525,000 1-a. Assuming an annual discount rate of 10%, calculate the present value of the contract amount. (EV of $1. PV of PVA of $1) 1-b. Which of the four actors is actually being paid the most? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assuming an annual discount rate of 10%, calculate the present value of the contract amount. Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. Derek Isabel Meredith George Present Value Day 1A Req 1B >
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