Vaughn Hardy recently rejected a $25,600,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $9,000,000 and annuat payments of $3,200,000. To sweeten the deal, the president of player personnel for the Seals has now offered a $27,920,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of five years. Click here to view factor tables Suppose you are Hardy's agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms, how much better is the second contract? (Round present value factor calculations to 4 decimal places, es. 1.2151 and final answers to 0 decimal places, es. 125. Enter negative anounts using either a negative sign preceding the number es -45 or parentheses e.s. (45).) Suppose you are Hardy's agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms, how much better is the second contract? (Round present value factor calculations to 4 decimal places, eg. 1.21 .51 and fnat answers to 0 decimal places, es. 125. Enter negative amounts using either a negative sign preceding the number es, -45 or parentheses eg. (45).) In present value terms, the second contract is than the old one. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{2}{|c|}{ TABLE B9.2 } & \multicolumn{9}{|c|}{ Present value of an annuity of \$1 per period } & & \\ \hline & 6% & 7% & 8% & 9% & 10% & 11% & 12% & 13% & 14% & 15% & 16% & 20% & 30% \\ \hline 1 & 0.9434 & 0.9346 & 0.9259 & 0.9174 & 0.9091 & 0.9009 & 0.8929 & 0.8850 & 0.8772 & 0.8696 & 0.8621 & 0.8333 & 0.7692 \\ \hline 2 & 1.8334 & 1.8080 & 1.7833 & 1.7591 & 1.7355 & 1.7125 & 1.6901 & 1.6681 & 1.6467 & 1.6257 & 1.6052 & 1.5278 & 1.3609 \\ \hline 3 & 2.6730 & 2.6243 & 2.5771 & 2.5313 & 2.4869 & 2.4437 & 2.4018 & 2.3612 & 2.3216 & 2.2832 & 2.2459 & 2.1065 & 1.8161 \\ \hline 4 & 3.4651 & 3.3872 & 3.3121 & 3.2397 & 3.1699 & 3.1024 & 3.0373 & 2.9745 & 2.9137 & 2.8550 & 2.7982 & 2.5887 & 2.1662 \\ \hline 5 & 4.2124 & 4.1002 & 3.9927 & 3.8897 & 3.7908 & 3,6959 & 3.6048 & 3.5172 & 3.4331 & 3.3522 & 3.2743 & 2.9906 & 2.4356 \\ \hline 6 & 4.9173 & 4.7665 & 4.6229 & 4.4859 & 4.3553 & 4.2305 & 4.1114 & 3.9975 & 3.8887 & 3.7845 & 3.6847 & 3.3255 & 2.6427 \\ \hline 7 & 5.5824 & 5.3893 & 5.2064 & 5.0330 & 4.8684 & 4.7122 & 4.5638 & 4.4226 & 4.2883 & 4.1604 & 4.0386 & 3.6046 & 2.8021 \\ \hline 8 & 6.2098 & 5,9713 & 5.7466 & 5.5348 & 5.3349 & 5.1461 & 4.9676 & 4.7988 & 4.6389 & 4.4873 & 4.3436 & 3.8372 & 2.9247 \\ \hline 9 & 6.8017 & 6.5152 & 6.2469 & 5.9952 & 5.7590 & 5.5370 & 5.3282 & 5.1317 & 4.9464 & 4.7716 & 4.6065 & 4.0310 & 3.0190 \\ \hline 10 & 7.3601 & 7.0236 & 6.7101 & 6.4177 & 6.1446 & 5.8892 & 5.6502 & 5.4262 & 5.2161 & 5.0188 & 4.8332 & 4.1925 & 3.0915 \\ \hline 11 & 7.8869 & 7.4987 & 7.1390 & 6.8052 & 6.4951 & 6.2065 & 5.9377 & 5.6869 & 5.4527 & 5.2337 & 5.0286 & 4.3271 & 3.1473 \\ \hline 12 & 8.3838 & 7.9427 & 7.5361 & 7.1607 & 6.8137 & 6.4924 & 6.1944 & 5.9176 & 5.6603 & 5.4206 & 5.1971 & 4.4392 & 3.1903 \\ \hline 13 & 8.8527 & 8.3577 & 7.9038 & 7.4869 & 7.1034 & 6.7499 & 6.4235 & 6.1218 & 5.8424 & 5.5831 & 5.3423 & 4.5327 & 3.2233 \\ \hline 14 & 9.2950 & 8.7455 & 8.2442 & 7.7862 & 7.3667 & 6.9819 & 6.6282 & 6.3025 & 6.0021 & 5.7245 & 5.4675 & 4.6106 & 3.2487 \\ \hline 15 & 9.7122 & 9.1079 & 8.5595 & 8.0607 & 7.6061 & 7.1909 & 6.8109 & 6.4624 & 6.1422 & 5.8474 & 5.5755 & 4.6755 & 3.2682 \\ \hline 16 & 10.1059 & 9.4466 & 8.8514 & 8.3126 & 7.8237 & 7.3792 & 6.9740 & 6.6039 & 6.2651 & 5.9542 & 5.6685 & 4.7296 & 3.2832 \\ \hline 17 & 10.4773 & 9.7632 & 9.1216 & 8.5436 & 8.0216 & 7.5488 & 7.1196 & 6.7291 & 6.3729 & 6.0472 & 5.7487 & 4.7746 & 3.2948 \\ \hline 18 & 10.8276 & 10.0591 & 9.3719 & 8.7556 & 8.2014 & 7.7016 & 7.2497 & 6.8399 & 6.4674 & 6.1280 & 5.8178 & 4.8122 & 3.3037 \\ \hline 19 & 11.1581 & 10.3356 & 9.6036 & 8.9501 & 8.3649 & 7.8393 & 7.3658 & 6.9380 & 6.5504 & 6.1982 & 5.8775 & 4.8435 & 3.3105 \\ \hline 20 & 11.4699 & 10.5940 & 9.8181 & 9.1285 & 8.5136 & 7.9633 & 7.4694 & 7.0248 & 6.6231 & 6.2593 & 5.9288 & 4.8696 & 3.3158 \\ \hline \end{tabular}
