Question
Your friend, a professional football player, has been approached by three different clubs, seeking to recruit him. Each club is offering him a three year
- Your friend, a professional football player, has been approached by three different clubs,
seeking to recruit him. Each club is offering him a three year contract, and the terms are set out
below. He is uncertain which offer to accept, and has asked for your advice.
Club A's Contract Club B's Contract Club C's Contract
Year 1 $2 million $2 million $7 million
Year 2 4 million 3 million 2 million
Year 3 7 million 8 million 3 million
Given a discount rate is 14%:
Which contract offers the greatest value?
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
11th Edition
1264413041, 9781264413041
