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Vaughn Hardy recently rejected a $17,200,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $6,450,000
Vaughn Hardy recently rejected a $17,200,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $6,450,000 and annual payments of $2.150.000. To sweeten the deal, the president of player personnel for the Seals has now offered a $18,890,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of five years. Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 balloon payment Total $2,150,000 2.230.000 2.310.000 2.390,000 2,500,000 7,310.000 518,890,000 Click here to view factor tables Suppose you are Hardy's agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms, how much better is the second contract (Round present value factor calculations to 4 decimal places, e8. 1.2151 and final answers to decimat places, eg. 125. Enter negative amounts using either a negative skin preceding the numbers. --Sor parentheses es (45)) Present value of old contract Present value of new contract in ante tem the stond contri tanto done
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