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The 76ers are considering two sponsorship contracts. The discount rate is 5% Contract 1: $1,500,000 per year for 3 years Contract 2: $4,000,000 up

The 76ers are considering two sponsorship contracts. The discount rate is 5% Contract 1: $1,500,000 per year for 3 years Contract 2: $4,000,000 up front What is the real value of Contract 1? What is the real value of Contract 2? Which contract should the Sixers accept to maximize their purchasing power?

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