Alocal newspaper headline blared, "bo smith signed for $30 million." a reading of the article revealed that on april 1, 2014, bo smith, the former record-breaking running back from football university, signed a $30 million package with the dallas rangers. 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 year 6). if bo's interest rate is 8% per year, what would his contract be worth at the time he signs it?

PV= 20.734,618.17

Explanation:

Giving the following information:

Bo Smith signed a $30 million package with the Dallas Rangers. 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 year 6). Bo's interest rate is 8%.

We need to use the following formula:

NPV= [Cf/(1+i)^n]

Cf= cash flow

NPV= 3000000 + 2,400,000/1.08 + 2,400,000/1.08^2 + + 3,000,000/1.08^10

NPV= 20.734,618.17

hello the answer is d

answer production department;