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You have been hired as a financial advisor to Michael Jordan. He has received two offers for playing professional basketball and wants to select the
You have been hired as a financial advisor to Michael Jordan. He has received two offers for playing professional basketball and wants to select the best offer, based on considerations of money only. Offer A is a $10m offer for $2m a year for 5 years. Offer B is a $11m offer of $1m a year for four years and $7m in year 5. What is your advice? (Hint: compare the present value of each contract by assuming a range of interest rate, say 8% - 14%) Offer A formula is =PV(8%,5,-2000000,0) using the rates 8%-14%. What is the Excel formula for Offer B
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