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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 take
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:
Derek: $540,00 ; 2 years
Isabel: $580,000 ; 3 years
Meredith: $450,000 ; Today
George: $440,000 ; 1 year
1a. Assuming an annual discount rate of 9%, calculate the present value of the contract amount (FV of $1, PV of $1, FVA of $1, and PVA of $1).
1b. Which of the four actors is actually being paid the most?
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