Question
Kim and Kanye have hired you to determine who has the best endorsement offer. Kim has been offered the job as a spokesperson for the
Kim and Kanye have hired you to determine who has the best endorsement offer.
Kim has been offered the job as a spokesperson for the National I Like Myself Foundation as they figure that they do not have to offer any advice to do the job. The NILMF will pay her $4,000 per month starting ten years from today for a total of 120 months. She then will receive $80,000 per year for six years with the first payment of $80,000 occurring twenty years from today. She also will receive $140,000 every year for five years with the first of these coming six months from today.
Kanye has been offered a job as the spokesperson for the Do You Believe I Get Paid For What I Do Foundation. He is happy it has nothing to do with what Kim is doing and that his has more letters. The DYBIGPFWIDF will pay him $60,000 per year for twenty years with the first of these coming today. He will also receive $800,000 six months after his last payment of $60,000. Finally he will receive $1,000,000 fifty years from today he was worried that he would not have enough for a 75th birthday gift for himself.
They want to know who has the best offer in todays dollars. Assume a 9% (compounded monthly) rate for your analysis. Show all of your work and give a total value for each of their offers.
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