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liraira [26]
3 years ago
9

A first-round draft choice quarterback has been signed to a three-year, $10 million contract. The details provide for an immedia

te cash bonus of $1 million. The player is to receive $2 million in salary at the end of the first year, $3 million the next, and $4 million at the end of the last year. Assuming a 10% discount rate, is this package worth $10 million? How much is it worth?
Business
1 answer:
inessss [21]3 years ago
7 0

Answer:

$8.31 million and No.

Explanation:

In this question, we have to find out the present value which is shown below:

= $1 + first year value ÷ ( 1 + discount rate) + second year value ÷ ( 1 + discount rate) ^ number of years + third year value ÷ ( 1 + discount rate) ^ number of years

= $1 + $2 million ÷ (1 + 10%) + ($3 million ÷ 1.10)^2  + ($4 million ÷ 1.10)^3

= $1 million + $1.82 million + $2.48 million + $3.01 million

= $8.31 million

No the package would not worth $10 million as its present value is $8.31 million

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Natalka [10]

Answer:

$268,500

Explanation:

When you use the indirect method to calculate net cash flows, you start with net income and then adjust it by:

  • adding the amount by which accounts receivable decreased = ($17,000 - $10,500) = $6,500
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net cash flow from operating activities = $270,000 + $6,500 - $8,000 = $268,500

3 0
3 years ago
At the beginning of her current tax year, Angela purchased a zero-coupon corporate bond at original issue for $30,000 with a yie
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Answer:

She will report an interest income of $1,827 for this year.

Explanation:

The yield to maturity is 6%. However, the interest on the bond is compounded semi-annually. Therefore, we need to calculate the interest income for either semi-annual period and then sum the two incomes.  

Interest income for first semi-annual period

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Interest income for second semi-annual period

= ($30,000 + $900) x 0.06 x 6/12

= $30,900 x 0.06 x 6/12

= $927

Interest income for the year

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= $ 1,827

4 0
3 years ago
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Explanation:

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The holder of such an estate holds it as a fee simple subject to that condition. If the given condition is not met the estate either goes to the original grantor or to a third party.

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