Question 1. Would you rather receive $1,000 a year for 10 years or $800 a year for 15 years if: A) your interest rate is 5%? B) Same question, but your interest rate is 20%?
Question 2. What is the present value of the following three year cash-flow stream if your interest rate is 6%.... Year 1 $200, Year 2 is $400 then Year 3 of $300 ?
Question 3. A famous Quarterback just signed a $15 million contract providing $3 million a year for 5 years. A less-famous receiver signed a $14 million, 5-year contract providing $4 million now plus $2 million a year for 5 years. Who is better paid, with an interest rate of 10%? How much and why?