What is his expected lifetime earnings

Assignment Help Financial Management

Reference no: EM132033355

Suppose that the present value of lifetime earnings is $20 million. Assume that interest rate (i) is 5% and the growth rate for 1 year of college is 10% for a certain player.

a) If the player goes to college for 1 year, what is his expected lifetime earnings? Now suppose that this growth rate decreases 2 percentage points each year (so r1 = 10%, r2 = 8%, r3 = 6%, etc).

b) How many years of college would the player attend (assuming he is rational)?

c) If the player decides to stay the amount that was decided in part b, what would be his expected lifetime earnings?

Reference no: EM132033355

Questions Cloud

How would you briefly rebut her comment : For her, all you need to know is how to use social media. How would you briefly rebut her comment?

What is trotskys beta : Trotsky's assets are divided in equal parts (both in terms of market value and book value) among the three divisions. What is Trotsky's Beta?

What factors should a company review before deciding : What factors should a company review before deciding to go abroad? Also, what advantages and disadvantages are there for segmenting

How would you evaluate if the process was working : As an HR OD practitioner, how would you select the appropriate intervention to implement?

What is his expected lifetime earnings : If the player goes to college for 1 year, what is his expected lifetime earnings?

What are the internal and external environmental factors : What are the internal and external environmental factors that may impact the development of a marketing plan for overseas expansion?

The most reliable capital budgeting technique : The most reliable capital budgeting technique that should be considered when comparing between mutually exclusive alternative investments is

Ethics pose special challenges to marketers : Ethics pose special challenges to marketers. For this reason companies need to provide policies and guidelines to assist marketers deal

Develop new ways of serving customers that remain : What strategic insights might be gained from develop new ways of serving customers that remain untapped by your competitors.

User Account

All Pages