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skelet666 [1.2K]
3 years ago
5

A basketball player is offered the following contract today, Jan. 1, 2012: $2 million immediately, $2.40 million in 2012, $2.90

million in 2013, $3.60 million in 2014, and $3.80 million in 2015. Assume all payments other than the first $2 million are paid at the end of the year. If the appropriate discount rate is 10 percent per year, what is the present value of the deal?
Business
1 answer:
weeeeeb [17]3 years ago
8 0

Answer:

The answer is $11.24 million Explanation:

Using the formula

Present worth = x/(1+R/100)∧n

R = 10%

Year 2012

2.40/(1+10/100)∧1

= 2.40/(1+0.1)∧1

= 2.40/(1.1)∧1

2.40/1.1

= 2.18

Year 2013

2.90/(1+10/100)∧2

= 2.90/(1+0.1)∧2

= 2.90/(1.1)∧2

2.90/1.21

= 2.396

Year 2014

3.60/(1+10/100)∧3

= 3.60/(1+0.1)∧3

= 3.60/(1.1 )∧3

3.60/1.331

= 2.70

Year 2015

To determine the present value

2+3.80/(1+10/100)∧4

= 5.8/(1+0.1)∧4

5.8/(1.1)∧4

5.8/1.4641

= 3.96

Therefore the present value, add together the value from year 1 to year 4

2.18 + 2.396 + 2.70 + 3.96

= 11.236

= 11.24 Approximately

Therefore the present value is $11.24 millions

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Sedbober [7]

Answer:

The stock price would be higher by $7.37

Explanation:

Free cash flow to equity = 195 million with a growth rate of 2% in perpetuity

Value of equity = Free cash flow to equity ÷ (Ce -g) = 195 million ÷ (13% - 2%)

= 190 ÷ 0.11 = $1,772,727,272.73 = $1,773 million

If growth rate is 3%, value of equity = 195 ÷ (13%-3%) = 195 ÷ 0.1 = $1,950  million

a. Value of stock = (1,773 + 15) million ÷ 22 = $81.27

b. Value of stock with 3% = 1,950 ÷ 22 = $88.64

Thus stock price would be higher by = b-a = $7.37

4 0
3 years ago
Electron Arts (E/A)is promoting a new video game with a very large demographic target (men, 18-49) They are already planning to
zloy xaker [14]

Answer:

B) reach.

Explanation:

Sine the marketing campaign will only last 45 days, it will be very short, and the potential audience is very large. Also during Holiday season a lot of campaigns are launched, so EA's campaign will have competition. So the ad agency must be very concerned with reaching a high percentage of their target audience. They want to produce a high market share and in order to do so, they must reach a lot of people.  

In advertising, reach means how many people or households are exposed to your marketing campaign.

6 0
3 years ago
In a university setting, each student is paired with another student for the purpose of getting assignments and turning in work
Inessa05 [86]

Answer:

one-to-one Unary

Explanation:

It is one-to-one binary  relationship because one student is grouped with one student only. Unary because they have the same relationship in the university  and share the same class and learning procedures.

In binary relationships there are various entities for example in this situation if the university or colleges were different then it would have been binary .

In the given question only one student is teamed up with one student therefore it is one to one not one to many.

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Jonathan loses his job a few months after graduating from college. His parents co-signed his student loans while he was in colle
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He will not risk defaulting
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In an initial survey designed to estimate the percentage of time air-express cargo loaders are idle, an analyst found that loade
oksian1 [2.3K]

Answer:

13.3%

Explanation:

The time in which the employee are free or not working due to halt in operation or a process. The employee are ready for work in this time and waiting for operation to start.

According to the given data

Total observations = 45 observations

Number of observation that found loader idle = 6 observations

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Estimated percentage of idle time = (6 / 45) x 100

Estimated percentage of idle time = 13.3%

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