Question
The Los Angeles Times headline announced today, Bellinger Angry His Deal Is Worse than Bettss. The L.A. Dodgers just signed Cody Bellinger to a contract
The Los Angeles Times headline announced today, Bellinger Angry His Deal Is Worse than Bettss. The L.A. Dodgers just signed Cody Bellinger to a contract consisting of eight, endofyear payments worth $9.0 million (M) each, with the first payment at the end of year 1. On the other hand, Mookie Bettss recent deal calls for six annual payments of $7.0M, starting one year from now and ending six years from now, along with payments of $14.0M in 7 years and $17.0M in 8 years. Bellinger ranted via Twitter, complaining that his contract is worth a million less than Mookies. If you perform any timevalue analysis, use a discount rate of 5%/year. (a) First, how did Bellinger get his number of a million? (b) Next, use what youve learned in this course thus far to shed light on Bellingers gripe. Indicate whether Bellinger is right or wrong, and briefly explain so he can understand.
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