my DIY starting pitcher for a double-A (AA)-level baseball team, the Yakima Hops; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 96 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 16-3 win-loss record, an earned run average (ERA) of 2.98, and 146 strikeouts in 117.0 innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Harry received the following email from his agent, Noah Never-Enough, indicating that he is being called up to the Wichita Wizards, the Hops's corresponding Major League Baseball (MLB) team. Moreover, Harry's contract is being revised to reflect his new status. The email describes the general terms and conditions of Harry's revised contract. From: Noah Never Enough To: Harry Hurler Subject: New Team, New Contract Proposal Harry, Conaratulations! You've been called up to the Wichita Wizards. Below are the offered Harry is so excited! According to Noah, the contract is worth $2,998,400-assuming receipt of all possible bonuses. After rereading the email twice and calling his family, Harry called you to review the terms of the contract and verify Noah's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Harry have agreed that any funds received could be invested to earn 7.00%, compounded monthly. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. 1 Assumptions and Calculated Values 2. 3 % Bank Rate Information: Harry's Bank Account Rate (compounded monthly) Monthly Bank Rate 4. % 5 Effective Annual Interest % Rate 6 7 Year 1 Year 2 Year 3 Year 4 Total value Salary and Bonus Information: 8 $ $ $ $ 9 $ 10 Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 11.5571 10.7780 10.0514 9.3737 11 $ ReadSpeake 12 13 Time-in-League Bonus $ 14 0.9657 Discount factor (based on Cell B4 above) 15 Discounted Time-in-League $ Bonus 16 17 Milestone Bonus $ $ 18 Discount factor (based on 0.9326 0.8697 0.8111 0.7564 20 21 $ $ $ $ 22 Performance Bonus Discount factor (based on Cell B5 above) 0.9326 0.8697 0.8111 0.7564 23 Discounted Performance $ $ Bonus 24 25 Monthly Endorsement $ Contract Payment 26 11.5571 10.7780 Discount factor (based on Cell B4 above) 27 $ $ Discounted Monthly Endorsement Payment 28 29 Contract's Total Nominal $ Value 30 Contract's Total Discounted $ Value 1. Given your worksheet calculations, which of the following statements is accurate? Is Noah's estimate of the value of Harry's contract accurate on either a nominal or discounted basis? Check all that apply. O Noah's estimate of the value of Harry's contract is incorrect on a nominal basis, and the error is $33,663. It is appropriate and necessary to discount the endorsement contract using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments on the endorsement contract. n It is annronriate and necessary to discount the performance bonus using the bank account's effective annual interest rate because of my DIY starting pitcher for a double-A (AA)-level baseball team, the Yakima Hops; last year, he was the first runner-up for the Minor League Player of the Year award. Using his 96 mph fastball, an impeccable curve ball and slider, and a reliable changeup pitch, he achieved a 16-3 win-loss record, an earned run average (ERA) of 2.98, and 146 strikeouts in 117.0 innings pitched. He is also your best friend. Two weeks ago, on his three-year anniversary with the team, Harry received the following email from his agent, Noah Never-Enough, indicating that he is being called up to the Wichita Wizards, the Hops's corresponding Major League Baseball (MLB) team. Moreover, Harry's contract is being revised to reflect his new status. The email describes the general terms and conditions of Harry's revised contract. From: Noah Never Enough To: Harry Hurler Subject: New Team, New Contract Proposal Harry, Conaratulations! You've been called up to the Wichita Wizards. Below are the offered Harry is so excited! According to Noah, the contract is worth $2,998,400-assuming receipt of all possible bonuses. After rereading the email twice and calling his family, Harry called you to review the terms of the contract and verify Noah's calculations. After an extended conversation about what he'll do with his newfound wealth, you and Harry have agreed that any funds received could be invested to earn 7.00%, compounded monthly. Contract Evaluation Worksheet Complete the following worksheet by inserting the appropriate values to evaluate the contract and answer the related questions. 1 Assumptions and Calculated Values 2. 3 % Bank Rate Information: Harry's Bank Account Rate (compounded monthly) Monthly Bank Rate 4. % 5 Effective Annual Interest % Rate 6 7 Year 1 Year 2 Year 3 Year 4 Total value Salary and Bonus Information: 8 $ $ $ $ 9 $ 10 Annual Salary (4% COLA) Monthly Salary Discount factor (based on Cell B4 above) Discounted Annual Salary 11.5571 10.7780 10.0514 9.3737 11 $ ReadSpeake 12 13 Time-in-League Bonus $ 14 0.9657 Discount factor (based on Cell B4 above) 15 Discounted Time-in-League $ Bonus 16 17 Milestone Bonus $ $ 18 Discount factor (based on 0.9326 0.8697 0.8111 0.7564 20 21 $ $ $ $ 22 Performance Bonus Discount factor (based on Cell B5 above) 0.9326 0.8697 0.8111 0.7564 23 Discounted Performance $ $ Bonus 24 25 Monthly Endorsement $ Contract Payment 26 11.5571 10.7780 Discount factor (based on Cell B4 above) 27 $ $ Discounted Monthly Endorsement Payment 28 29 Contract's Total Nominal $ Value 30 Contract's Total Discounted $ Value 1. Given your worksheet calculations, which of the following statements is accurate? Is Noah's estimate of the value of Harry's contract accurate on either a nominal or discounted basis? Check all that apply. O Noah's estimate of the value of Harry's contract is incorrect on a nominal basis, and the error is $33,663. It is appropriate and necessary to discount the endorsement contract using the bank account's effective annual interest rate because of differences in the timing of the compounding of the bank account and that of the payments on the endorsement contract. n It is annronriate and necessary to discount the performance bonus using the bank account's effective annual interest rate because of