What is the present value of the lump sum he will receive

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Reference no: EM131831722

1. Mr. Johnson's grandfather set up a trust fund that will pay him $2,500,000 on his 40th birthday. Today, Mr. Johnson turned 21, so he will need to wait 19 years to get his money. If the appropriate discount rate is 8%, what is the present value of the lump sum he will receive?

2. LeBron James will receive $50,000,000 in the final year of his contract (4 years from now). If the discount rate is 8% per year, what is the salary worth in today's dollars? For simplicity assume that he gets the salary in a lump sum exactly 4 years from today.

Reference no: EM131831722

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