A star basketball player signs a contract that newspaper reports say is worth $10 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is worth
A) $10 million as reported in the papers.
B) less than $10 million since the present value of $5 million received one or more years from now is less than $5 million.
C) more than $10 million because the present value of $5 million received one or more years from now is more than $5 million.
D) either more or less than $10 million, depending on the value of the discount rate.
Answer: B
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According to the above table, what is the absolute price elasticity of demand if price falls from $8.00 to $7.50?
A) 4.00 B) 2.82 C) 1.80 D) 1.21
An increase in the government budget deficit shifts the supply of domestic currency in the market for foreign exchange to the right
a. True b. False Indicate whether the statement is true or false
In the long run, an increase in the money supply
a. leaves prices and unemployment unchanged. b. raises prices and unemployment. c. raises prices and leaves unemployment unchanged. d. leaves prices unchanged and reduces unemployment.
An upward shift in the Fed's reaction function is equivalent to:
A. an increase in the Fed's long-term target for inflation. B. an upward shift of short-run aggregate supply. C. a downward shift of short-run aggregate supply. D. a decline in the Fed's long-term target for inflation.