Question
Ruth Gehrig has received contract offers from three professional aquatic badminton teams. The details are below. Which contract is most valuable? a.Salary of $500,000 per
Ruth Gehrig has received contract offers from three professional aquatic badminton teams. The details
are below. Which contract is most valuable?
a.Salary of $500,000 per year for 7 years, starting next year.
b. Salary of $333,333 per year for 7 years, starting next
year, plus a $1 million signing bonus, received immediately.
c. $350,000 per year for 3 years, starting next year. In years 4 - 7, the salary increases to $700,000 per year.
The interest rate is 2% per year.
Please use the PV formulas and not excel. I am trying to learn the formulas first :)
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