When Alex Rodriguez moved to the Texas Rangers in 2001, he received a lot of attention for his "3252 milion contract the total of the payments promised was $252 million) He later moved to the Yankees butsume the following in order to determine the value of his contract when he signed Rodrigez care $16 million in the first year, 57 million in years through 4 319 million in years and 6,523 milion in year and $27 million in yours through 10. He also receives his $10 milion ging to read equally over the first years ($2 milion per year. He deformed payments begin in 2011. The red payment amount to 3 andare in the man Mamounts of londing in 2030 However, he was witte diferent. All the deferred payment wil on 3% per year they are paid Forecame the 55 millions deferred from 2001 to 2011, 10 years in that it will be 56.10 when Asume that the payment detened to 2012 is deferred from 2002 och payment is deferred 10 years) Cac the true promovente LAGS NOWI 2001 to 2011, or 10 years, meaning that will be $6.7190 million when pard Assume that the S4 milion payment deferred to 2012 is defined from 2002 (each payment is deferred 10 years) The contract is to your contract, but each year has a deferred component to that cashions are paid out over a total of 20 years. The contractual payments, signing bongs, and deferred components are given below. Note that by contracte de components are not paid in the year they were but de padure 10 years later 2061 2002 2003 2004 2005 2006 2007 2004 $16M $17 2009 SIM 2010 $17M 319 M STOM $23 $27M $27M $27M a. Calculate promised payments de contract, incluing the defend payments with rest 2007 522 M 2000 527M 2006 $19 M 2000 $27 2010 927 M 2001 555M 12 M 2011 Deferred 55M 2002 $17M 52 2012 2003 $17M 2M 2013 2004 $17M 32 2014 2005 510M $2M 2015 LACS NOW 2016 2017 2010 2019 2020 34U SOM $3 53 $3M SJM $3M 33M 53M w the trames with Assume that an appropriate discount rate for A-Rod to apply to the contract payments is 7% per year. a. Calculate the true promised payments under this contract, including the deferred payments with interest. b. Draw a timeline of all of the payments C. Calculate the present value of the contract d. Compare the present value of the contract to the quoted value of $262 million. What explains the difference? When Alex Rodriguez moved to the Texas Rangers in 2001, he received a lot of attention for his "3252 milion contract the total of the payments promised was $252 million) He later moved to the Yankees butsume the following in order to determine the value of his contract when he signed Rodrigez care $16 million in the first year, 57 million in years through 4 319 million in years and 6,523 milion in year and $27 million in yours through 10. He also receives his $10 milion ging to read equally over the first years ($2 milion per year. He deformed payments begin in 2011. The red payment amount to 3 andare in the man Mamounts of londing in 2030 However, he was witte diferent. All the deferred payment wil on 3% per year they are paid Forecame the 55 millions deferred from 2001 to 2011, 10 years in that it will be 56.10 when Asume that the payment detened to 2012 is deferred from 2002 och payment is deferred 10 years) Cac the true promovente LAGS NOWI 2001 to 2011, or 10 years, meaning that will be $6.7190 million when pard Assume that the S4 milion payment deferred to 2012 is defined from 2002 (each payment is deferred 10 years) The contract is to your contract, but each year has a deferred component to that cashions are paid out over a total of 20 years. The contractual payments, signing bongs, and deferred components are given below. Note that by contracte de components are not paid in the year they were but de padure 10 years later 2061 2002 2003 2004 2005 2006 2007 2004 $16M $17 2009 SIM 2010 $17M 319 M STOM $23 $27M $27M $27M a. Calculate promised payments de contract, incluing the defend payments with rest 2007 522 M 2000 527M 2006 $19 M 2000 $27 2010 927 M 2001 555M 12 M 2011 Deferred 55M 2002 $17M 52 2012 2003 $17M 2M 2013 2004 $17M 32 2014 2005 510M $2M 2015 LACS NOW 2016 2017 2010 2019 2020 34U SOM $3 53 $3M SJM $3M 33M 53M w the trames with Assume that an appropriate discount rate for A-Rod to apply to the contract payments is 7% per year. a. Calculate the true promised payments under this contract, including the deferred payments with interest. b. Draw a timeline of all of the payments C. Calculate the present value of the contract d. Compare the present value of the contract to the quoted value of $262 million. What explains the difference