Algebraic time value of money equations

Assignment Help Finance Basics
Reference no: EM13839744

Please use Excel financial functions or algebraic time value of money equations in your Excel cell formulas to answer these questions in your spreadsheet in order to receive credit for correct answers.

Should he stay or should he go?

Landon Lowman, the redshirt sophomore 20-year-old star quarterback of the university football team, is approached about skipping his last two years of college and entering the professional football draft. Landon expects that his football career will be over by the time he is 32 years old. Talent scouts estimate that Landon could receive a signing bonus of $5 million today, along with a five-year contract for $3 million per year (payable at the end of each year). They further estimate that he could negotiate a contract for $6 million per year for the remaining seven years of his career. The scouts believe, however, that Landon will be a much higher draft pick if he improves by playing two more years of college football. If he stays at the university, he is expected to receive a $10 million signing bonus in two years, along with a five-year contract for $4 million per year. After that, the scouts expect Landon to obtain a five-year contract for $7 million per year to take him into retirement. Assume that Landon can earn a 7% return over this time.

1. What is the present value today (when Landon is 20) of the QB's future expected NFL earnings if he enters the NFL now?

2. What is the present value today (when Landon is 20) of the QB's future expected NFL earnings if he finishes his last 2 years of college enters the NFL 2 years from now? 3. Should Landon stay in college or go to the NFL now?

Reference no: EM13839744

Questions Cloud

What is the anngle of the particles direction of travel? : what is the anngle of the particles direction of travel?
Compare classical conditioning and operant conditioning : Compare and contrast classical conditioning and operant conditioning. According to the research you have undertaken, which theory is more effective in marketing?
Populate the gantt chart using given table : Use the data from the following table to populate the Gantt chart. You can either treat these as individual tasks, or just make these subtasks of a single task. Either way, you'll need to read the instructions in the spreadsheet to add some rows
What is length of runway required for the plane to take off : What is the length of runway required for the plane to take off
Algebraic time value of money equations : Please use Excel financial functions or algebraic time value of money equations in your Excel cell formulas to answer these questions in your spreadsheet in order to receive credit for correct answers.
Explore some option of msgbox style : Problem 1: Write a sub routine to display the following message. The message should at the top of all other window, and it should prevent the user from doing anything in any application until one of the buttons is clicked.
Conduct a scenario analysis - what is its expected npv : Suppose that the project would be allocated $10,000 of existing overhead costs. Should these costs be included in the cash flow analysis? Explain.
How is phenol converted into salicylic acid : How is phenol converted into salicylic acid
Write about the example of it leveraging business advantage : Write a research report on actual example of IT leveraging business advantage at a managerial level. Your report will be judged on the quality of your research and report presentation.

Reviews

Write a Review

Finance Basics Questions & Answers

  Bay pines medical center estimates that a capitated

bay pines medical center estimates that a capitated population of 50000 would utilize 440 inpatient days per 1000

  Conch republic electronics is a mid-sized electronics

1.conch republic electronicsa.what is the irr of the project?b.what is the npv of the project based on the required

  Find debt expense

ABC start in 2008 with a debit balance in accounts receivable of $20,000 and credit balance in Allowance for Doubtful accounts of $1,500. During the year, ABC trade $400,000 of produce and received $340,000 from customers.

  Based on the data contained in table what is the break even

based on the data contained in table a what is the break even point is sales dollars?table aaverage selling price per

  Lucas has 5 million shares outstanding and the current

lucas inc. earned 10 million last year and retained 6 million. lucas has 5 million shares outstanding and the current

  Graphic designs has 120000 shares of cumulative preferred

graphic designs has 120000 shares of cumulative preferred stock outstanding. preferred shareholders are supposed to be

  What will be your estimate of npv and irr

What will be your estimate of NPV and IRR if the average RDS sales price per unit must be reduced by 5 percent (from $10,900 per unit to $10,355 per unit) in order to sell the 18,000 proposed units that are being manufactured? Will you still recommen..

  Consider an asset with a beta of 15 a risk-free rate of 3

consider an asset with a beta of 1.5 a risk-free rate of 3 and a market return of 8. what is the expected return on

  Institutions prefer to provide credit in financial markets

Explain why some financial institutions prefer to provide credit in financial markets outside their own country.

  Calculate npv and irr for each machine

These cash flows include depreciation expenses. Calculate NPV and IRR for each machine and select the best choice for the MIT Whitehead Institute.

  What is the value of the bond

Coupon payments are made annually. The bond matures in 19 years and face value is $12,000. ytm is 8%.

  What rate of return are you being offered

Suppose an investment offers to triple your money in 72 months. What rate of return are you being offered? 5.15%, 4.22%, 6.29%, 4.68%, 3.51%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd