1. A Baller has been offered the following new contracts. All are guaranteed. If the discount rate is 6% how much is each worth today? Which do you think is the best option? Why?
2. A yearly contract for $20 million per year for each of the next 4 years.
3. A yearly contract for $10 million per year for each of the next 8 years.
4. A yearly contract for $8 million the first year which is guaranteed to increase by 3% per year for the next 8 years.
5. A back-loaded contract for $90 million paid at the end of 5 years.
6. A back-loaded contract for $100 million paid at the end of 8 years.
7. A front-loaded contract for $65 million paid today.