Login $-$ Atlanta Metropolitan State College

Chapter $10$ Homework

Fund

Mc

graw Holl

$Mra{w}_{Mc}$

Hhil

The Time Value of Money

probability that Luke will play.

$$192,455**3\mathrm{.}170**0\mathrm{.}25$

$=$$$152,521$

What is the total value of Contract offer #$3?$

Cont

J

$6$

$7$

$8$

$9$

$10$

$11$

$$5,762,512$

$12$

$13$

Incorrect, try again. Hint: by this point you know all of the components and simply need to put them together.

What is the total value of Contract offer #$3?$

Enter a response then click Submit below

$14$

$15$

$16$

$17$

$18$

$19$

$20$

$25$

$30$

$40$

Submit

$50$Offer $1$

$$942,455$ immediate signing bonus

$$850,000$ at the end of each year for the next $5$ years

Offer $2$

$$221,228$ immediate signing bonus

$$100,000$ at the end of Years $1$ through $4$

$$150,000$ at the end of Years $5$ through $10$

$$1,000,000$ and the end of Years $11$ through $40$

Offer $3$

$$1,008,491$ immediate signing bonus

$$500,000$ at the end of Year $1$

$$1,000,000$ at the end of Year $2$

$$1,500,000$ at the end of Year $3$

$$2,500,000$ at the end of Year $4$

$$192,455$ bonus for any year Luke is selected to play in the Pro Bowl All Star game $(25\%$ probability in each year$)$

Canadian Football League

$$1,142,455$ immediate signing bonus

$$2,000,000$ at the end of Years $1$ through $3$

Only signing bonus is guaranteed $(80\%$ probability of being on team each year$)$