This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Michael received a professional baseball contract paying 7,000,000 per year for 5 years, Bert ... (Read 96 times)

OSWALD

  • Hero Member
  • *****
  • Posts: 580
on: Jul 11, 2018
Michael received a professional baseball contract paying 7,000,000 per year for 5 years, Bert received a two-year contract for 16,000,000 per year. For purposes of calculations, treat these contracts as ordinary annuities.
 
  Who's contract has a greater present value if we assume a discount rate of 6?
  A) Bert = 29,334,283
  B) Michael = 29,486,547
  C) Bert = 39,459651
  D) Michael = 39, 743,196

Question 2

Which of the following equations for the Book value Plus Adjustment method is correct?
 
  A) Value of equity (VE) = market value of equity - adjustments
  B) Value of equity (VE) = book value of equity + adjustments
  C) Value of equity (VE) = book value of equity - adjustments
  D) Value of equity (VE) = market value of equity + adjustments


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

johnharpe

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jul 11, 2018
Answer to Question 1

B
Explanation: B) Michael: Via Calculator: N = 5, I =6, PMT = 5,000,000, Solve for PV = 29,486,547.
Bert: Via Calculator: N = 2, I =6, PMT = 16,000,000, Solve for PV = 29,334,283.

Answer to Question 2

B


OSWALD

  • Member
  • Posts: 580
Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)

ecabral0

  • Member
  • Posts: 310
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

The calories found in one piece of cherry cheesecake could light a 60-watt light bulb for 1.5 hours.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

To combat osteoporosis, changes in lifestyle and diet are recommended. At-risk patients should include 1,200 to 1,500 mg of calcium daily either via dietary means or with supplements.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Lake position in the landscape and proportion of water received as groundwater (data from Webster et Lake position in the landscape and proportion of water received as groundwater (data from Webster et
Reindeer antlers grow again each year under a layer of fur called velvet. This reindeer is losing th Reindeer antlers grow again each year under a layer of fur called velvet. This reindeer is losing th
This older woman is exploring new avenues of enjoyment as she avoids stagnation in her later years This older woman is exploring new avenues of enjoyment as she avoids stagnation in her later years
To examine a child’s ear, the pinna should be pulled back and up for children over 3 years; the pinn To examine a child’s ear, the pinna should be pulled back and up for children over 3 years; the pinn
The declining age of menarche over the past 150 years has been measured in many European countries, The declining age of menarche over the past 150 years has been measured in many European countries,
Earth 65 Million Years Ago Earth 65 Million Years Ago
Video: ETC Protein Complexes & Chemiosmosis (Total ATP Production and ATP Synthase)

For a complete list of videos, visit our video library