Question
Gregorio Pucino, a professional soccer play is offered a 5-year contract that pays him the following amount: Year 1: $1.2 million Year 2: $1.6 million
Gregorio Pucino, a professional soccer play is offered a 5-year contract that pays him the following amount:
Year 1: $1.2 million
Year 2: $1.6 million
Year 3: $2.0 million
Year 4: $2.4 million
Year 5: $2.8 million
Under the terms of the agreement, all payments are made at the end of each year. Instead of accepting the contract, the soccer player asks his agent to negotiate a contract with a present value of $1.0 million more than that offered. In addition, the soccer player wants to receive his payments in the form of a 5-year annuity due. All cash flows are discounted at 10 percent. If the team agreed to the player's terms, what would be this player's annual salary in millions of dollars?
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