In September 2011, the Tennessee Titans signed running back Chris Johnson to a contract reportedly worth $56 million. Johnson’s salary included a $10 million signing bonus to be paid immediately and $3 million in salary for 2011. The remaining salary was $8 million in 2012, $10 million in 2013, $8 million in 2014 and 2015, and $9 million in 2016.
Required:
If the appropriate interest rate is 11 percent, what kind of deal did the running back scamper off with? Assume all payments other than the first $10 million are paid at the end of the contract year. (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567). Round your answer to 2 decimal places (e.g., 32.16).)
Present value $