Present values with multiple cash flows a first-round-draft


Question: Present Values with Multiple Cash Flows. A first-round-draft choice quarterback has been signed to a three-year, $10 million contract. The details provide for an immediate cash bonus of $1 million. The player is to receive $2 million in salary at the end of the first year, $3 million the next, and $4 million at the end of the last year. Assuming a 10 percent discount rate, is this package worth $10 million? How much is it worth?

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Finance Basics: Present values with multiple cash flows a first-round-draft
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