"The Director of Marketing of you organization asks for your advice regarding sponsorship deals she is contemplating.
She has to choose between the following:
* A 15 year sponsorship paying $100,000 per year.
* A 15 year sponsorship initially paying $75,000 per year and increasing 5% each year.
* A 15 year sponsorship initially paying $45,000 per year and increasing 12% each year.
Questions:
1) Determine the nominal value of each year for each proposal, as well as the total present value of each proposal. Compute one outcome with a "discount rate" of 5% only.
2) Which proposal should the marketing director choose?