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The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Filming is expected to
The four actors below have just signed a contract to star in a dramatic movie about relationships among hospital doctors. Filming is expected to take two years to complete. Each person signs independent contracts today with the following terms: Contract Terms Contract Amount Payment Date Derek Isabel $ 430,000 2 years Meredith 470,000 370,000 3 years Today George 330,000 1 year Required: 1-a. Assuming an annual discount rate of 8%, calculate the present value of the contract amount (EV of $1. PV of $1. EVA of $1, and PVA of $1) 1-b. Which of the four actors is actually being paid the most?
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