Please use Excel financial functions or algebraic time value of money equations to answer these questions in your spreadsheet.

Part 4. NPV

Robert, the sophomore 20-year-old star quarterback of the university soccer team, is approached about skipping his last two years of college and entering the professional soccer draft. Robert expects that his soccer career will be over by the time he is 32 years old. Talent scouts estimate that Robert could receive a signing bonus of $15 million today, along with a four-year contract for $2 million per year (payable at the end of each year). They further estimate that he could negotiate a contract for $4 million per year for the remaining eight years of his career. The scouts believe, however, that Robert will be a much higher draft pick if he improves by playing two more years of college soccer. If he stays at the university, he is expected to receive a $25 million signing bonus in two years, along with a five-year contract for $3 million per year. After that, the scouts expect Robert to obtain a five-year contract for $5 million per year to take him into retirement. Assume that Robert can earn a 8% return over this time.

What is the present value today (when Robert is 20) of the QBs future expected NFL earnings if he enters the NFL now?

What is the present value today (when Robert is 20) of the QBs future expected NFL earnings if he finishes his last 2 years of college enters the NFL 2 years from now?

Should Robert stay in college or go to the NFL now?

Part 5. Monthly compounding

Bobby Brown decides to buy a Nissan Maxima. After paying a down payment and taxes, Bobby Brown can finance the rest of the purchase price with a loan of $27,000 for 60 months at a special finance rate offered by Nissan: 0.9% APR compounded monthly. Answer the following.

What is the effective annual rate charged on this car loan?

What would be Bobby Browns monthly payment under this loan?

Bobby Brown also discovers instead of the special finance rate he could receive

$1500 cash back that he can use as an additional down payment which would lower his loan amount by the cash back amount. At what APR would Bobby Brown have the same monthly payment with the cash back option as he would with the special finance rate offer that you found in the last question?

Bobby Brown finds he can get 2.0% APR Financing if he elects the cash back option. What will his monthly payment be under this option and should he elect this cash back option over Nissans special APR financing option?