Question

A star basketball player signs a contract that newspaper reports indicate is worth​ $10 million. The player receives​ $2 million upon​ signing, and​ $2 million every year for four years. The contract is worth A. some amount around​ $10 million. To determine whether it is more or less than​ $10 million we need to know whether the interest the player can earn is more or less than the market rate of interest. B. ​$10 million as reported in the press. C. more than​ $10 million since the present value of​ $2 million received one or more years from now is more than​ $2 million. D. less than​ $10 million since the present value of​ $2 million received one or more years from now is less than​ $2 million.

Answer 1

Answer:

D

Explanation:

-less than $10 million since the present value of $2million received one or more years from now is less than $2million