Part (b): In 2000, a star major-league baseball player signed a 10-year, $254 million contract with the Texas Rangers. Assume that equal payments would have been made each year to this individual and that the owner's cost of capital (discount rate) was 13% at the time the contract was signed. What is the present value cost of the contract to the owners as of January 1, 2000, the date the contract was signed, in each of the following independent situations? (Use Table 1 and Table 2.) (Round your answers to the nearest whole dollar amount and not in millions.) Required: 1. The baseball player received the first payment on December 31, 2000. 2. The baseball player received the first payment on January 1, 2000, the date the contract was signed. 3. Assuming the owner is in the 44% income tax bracket, calculate your answer for requirement 1. TABLE 1 Present Value of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0.962 0.925 0.889 0.855 0.822 0.790 0.760 0.731 0.703 0.676 0.650 0.625 0.601 0.577 0.555 0.534 0.513 0.494 0.475 0.456 0.422 0.390 0.375 0.308 0.253 0.208 0.952 0.907 0.864 0.823 0.784 0.746 0.711 0.677 0.645 0.614 0.585 0.557 0.530 0.505 0.48 0.458 0.436 0.416 0.396 0.377 0.342 0.310 0.295 0.231 0.181 0.142 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.558 0.527 0.497 0.469 0.442 417 0.394 0.371 0.350 0.331 0.312 0.278 0.247 0.233 0.174 0.130 0.097 0.935 0.873 0.816 0.763 0.713 0.666 0.623 0.582 0.544 0.508 0.475 0.444 0.415 0.388 0.362 0.339 0.317 0.296 0.277 0.258 0.226 0.197 0.184 0.131 0.094 0.067 0.926 0.857 0.794 0.735 0.681 0.630 0.583 0.540 0.500 0.463 0.429 0.397 0.368 0.340 0.917 0.842 0.772 0.708 0.650 0.596 0.547 0.502 0.460 0.422 0.388 0.356 0.326 0.299 0.275 0.252 0.231 0.212 0.194 0.178 0.150 0.126 0.116 0.075 0.049 0.032 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.350 0.319 0.290 0.263 239 0.218 0.198 0.180 0.164 0.149 0.123 0.102 0.092 0.057 0.036 0.022 0.901 0.812 0.731 0.659 0.593 0.535 0.482 0.434 0.391 0.352 0.317 0.286 0.258 0.232 0.209 0.188 0.170 0.153 0.138 0.124 0.101 0.082 0.074 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 0.287 0.257 0.229 0.205 0.183 0.163 0.146 0.130 0.116 0.104 0.083 0.066 0.059 0.033 0.019 0.011 0.885 0.783 0.693 0.613 0.543 0.480 0.425 0.376 0.333 0.295 0.261 0.231 0.204 0.181 0.160 0.141 0.125 0.111 0.098 0.087 0.068 0.053 0.047 0.026 0.014 0.008 0.877 0.769 0.675 0.592 0.519 0.456 0.400 0.351 0.308 0.270 0.237 0.208 0.182 0.160 0.140 0.123 0.108 0.095 0.083 0.073 0.056 0.043 0.038 0.020 0.010 0.005 0.870 0.756 0.658 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.215 0.187 0.163 0.141 0.123 0.107 0.093 0.081 0.070 0.061 0.046 0.035 0.030 0.015 0.008 0.004 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 0.135 0.112 0.093 0.078 0.065 0.054 0.045 0.038 0.031 0.026 0.800 0.640 0.512 0.410 0.328 0.262 0.210 0.168 0.134 0.107 0.086 0.069 0.055 0.044 0.035 0.028 0.023 0.018 0.014 0.012 0.007 0.005 0.004 0.001 0.000 0.000 0.769 0.592 0.455 0.350 0.269 0.207 0.159 0.123 0.094 0.073 0.056 0.043 0.033 0.025 0.020 0.015 0.012 0.009 0.007 0.005 0.003 0.002 0.001 0.000 0.000 0.000 0.315 16 17 18 19 20 22 24 25 30 35 40 0.292 0.270 0.250 0.232 0.215 0.184 0.158 0.146 0.099 0.068 0.046 0.018 0.013 0.010 0.044 0.004 0.026 0.015 0.002 0.001 Note: The present value (PV) factor for N periods and rate r per period = 1 = (1 + r). For example, the PV factor for 10%, 5 years = 1 = (1 + 0.10)% = 0.621 (rounded). TABLE 2 Present Value of Annuity of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 24 25 30 35 40 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 14.451 15.247 15.622 17.292 18.665 19.793 0.952 1.859 2.723 3.546 4.329 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 13.163 13.799 14.094 15.372 16.374 17.159 0.943 1.833 2.673 3.465 4.212 4.917 5.582 6.210 6.802 7.360 7.887 8.384 8.853 9.295 9.712 10.106 10.477 10.828 11.158 11.470 12.042 12.550 12.783 13.765 14.498 15.046 0.935 1.808 2.624 3.387 4.100 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.358 8.745 9.108 9.447 9.763 10.059 10.336 10.594 11.061 11.469 11.654 12.409 12.948 13.332 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.201 10.529 10.675 11.258 11.655 11.925 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5.535 5.995 6.418 6.805 7.161 7.487 7.786 8.061 8.313 8.544 8.756 8.950 9.129 9.442 9.707 9.823 10.274 10.567 10.757 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5.759 6.145 6.495 6.814 7.103 7.367 7.606 7.824 8.022 8.201 8.365 8.514 8.772 8.985 9.077 9.427 9.644 9.779 0.901 1.713 2.444 3.102 3.696 4.231 4.712 5.146 5.537 5.889 6.207 6.492 6.750 6.982 7.191 7.379 7.549 7.702 7.839 7.963 8.176 8.348 8.422 8.694 8.855 8.951 0.893 1.690 2.402 3.037 3.605 4.111 4.564 4.968 5.328 5.650 5.938 6.194 6.424 6.628 6.811 6.974 7.120 7.250 7.366 7.469 7.645 7.784 7.843 8.055 8.176 8.244 0.885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.170 7.283 7.330 7.496 7.586 7.634 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.743 6.835 6.873 7.003 7.070 7.105 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.359 6.434 6.464 6.566 6.617 6.642 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870 4.909 4.937 4.948 4.979 4.992 4.997 0.800 1.440 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 0.769 1.361 1.816 2.166 2.436 2.643 2.80 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.323 3.327 3.329 3.332 3.333 3.333 3.887 3.910 3.928 3.942 3.954 3.970 3.981 3.985 3.995 3.998 3.999 Note: The present value (PV) annuity factor for N periods and a rate of r per period = (1 - (1 + r)-N) - r. For example, for N = 5 and r = 0.10, the PV annuity factor = 3.791 (rounded)