Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Bachelor and Bachelorette have hired you to determine who has the best endorsement offer. The Bachelor has been offered the job as a spokesperson

The Bachelor and Bachelorette have hired you to determine who has the best endorsement offer. The Bachelor has been offered the job as a spokesperson for the I Really Like Myself Foundation as they figure that they do not have to offer any advice to do the job. The IRLMF will pay him $2,000 per month starting ten years from today for a total of 120 months. He then will receive $40,000 per year for six years with the first payment of $40,000 occurring twenty years from today. He also will receive $70,000 every year for five years with the first of these coming six months from today. The Bachelorette has been offered a job as the spokesperson for the Do You Believe I Am Getting Paid For This Foundation. She is happy it has nothing to do with what The Bachelor is doing and that hers has more letters. The DYBIAGPFTF will pay her $30,000 per year for twenty years with the first of these coming today. She will also receive $400,000 six months after her last payment of $30,000. Finally she will receive $500,000 fifty years from today she was worried that she would not have enough for a 75th birthday gift for himself. They want to know who has the best offer in todays dollars. Assume a 6% (compounded monthly) rate for your analysis. Show all of your work as presented in class and give a total value for each of their offers.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Freedom And Finance Democratization And Institutional Investors In Developing Countries

Authors: M. Haley

1st Edition

0333914481, 1403940185, 9780333914489, 9781403940186

More Books

Students also viewed these Finance questions