Cash Flows and Equivalence Factors (discrete compounding and discrete cash flows:
A local newspaper headline blared, "Bo Smith Signs for $30 Million." The article revealed that, on April 1, 2006, Bo Smith, the former record-breaking running back from Football University, signed a $30 million package with the Nebraska Lions. The terms of the contract were $3 million immediately, $2.4 million per year for the first five years (with the first payment after one year), and $3 million per year for the next five years (with the first payment at the end of year six). If the interest rate is 8% compounded annually, what is Bo's contract worth at the time of contract signing?