A famous quarterback just signed a $14.0 million contract providing $2.6 million a year for 4 years. A less famous receiver signed a $13.0 million 4-year contract providing $3 million now and $2.5 million a year for 4 years. The interest rate is 8%.
a. What is the PV of the quarterback's contract? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Present value $ million
b. What is the PV of the receiver's contract? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Present value $ million
c. Who is better paid?
Quarterback
Receiver