Poor Bobby Bonilla! The newspapers claim that he is making $5.7 million a year. He claims that this is not true in a present value sense and that he will really be making the following amounts for the next 5 years:

Year	Amount
0 (now)	$ 5.5 million (Sign up Bonus)
1	$ 4 million
2	$ 4 million
3	$ 4 million
4	$ 4 million
5	$ 7 million

a. Assuming that Bonilla can make 7% on his investments, what is the present value of his contract?

b. If you wanted to raise the nominal value of his contract to $30 million, while preserving the present value, how would you do it? (You can adjust only the sign up bonus and the final year's cash flow.)

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