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Regine believes the Orioles might have some hesitation about locking in Scialomie for five years, so she thinks about proposing a four-year contract instead of

Regine believes the Orioles might have some hesitation about locking in Scialomie for five years, so she thinks about proposing a four-year contract instead of the five-year deal. In such an offer, she knows that there needs to be enough deferred compensation so that Scialomie's salary over the four years of playing does not overly burden team payroll. Design two contract counteroffers for Regine to present to the Orioles. They must be structured differently

from each otherto give the Orioles some optionsand both must meet the following characteristics:

a. The contract has a total PV of between $15.5m and $16.0m, assuming a 5.5% discount rate

b. Scialomie must earn at least $0.6m (nominal value) in each of the playing years

c. There is deferred compensation build into the contract.

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