Problem: A famous receiver just signed a $10.4 million contract providing $2.6 million a year for 4 years. A less famous receiver signed a $9.4 million 4-year contract providing $3 million now and $1.6 million a year for 4 years. The interest rate is 8%.
1) Calculate the PV of the quarterback. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Present value= _______________ million
2) Calculate the PV of the receiver. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Present value = _________________ million
3) Who is better paid?