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ACC202-Ch9-Problem-1

# ACC202-Ch9-Problem-1 - Name Instructor Date Course...

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FileName: ad23dc2f0b3002c4835580f47b42c17a69f0db01.xls, Tab: Problem P9-1, Page 1 of 2, 06/07/2009, 07:27:27 Name: Date: Instructor: Course: Problem P9-1 Present Value Analysis Year 1 \$1,000,000 Year 2 1,100,000 Year 3 1,200,000 Year 4 1,300,000 Year 5 1,400,000 Year 5 balloon payment 4,000,000 Total \$10,000,000 Required: Rejected contract: Present value of the signing bonus: Amount Present value of the annual payments: Formula Total value of the rejected contract: Formula Second contract: Time PV 1 \$1,000,000 Formula 2 \$1,100,000 Formula 3 \$1,200,000 Formula 4 \$1,300,000 Formula 5 \$1,400,000 Formula 5 \$4,000,000 Formula Formula Narrative answer: Managerial Accounting , Second Edition by James Jiambalvo Solving Managerial Accounting Problems Using Microsoft Excel for Windows Templates by Rex A Schildhouse Carter "Flip" Allison recently rejected an \$8,000,000, five-year contract with the Vancouver Seals. The contract offer called for an immediate signing bonus of \$3,000,000 and annual payments of \$1,000,000. To "sweeten" the deal, the president of player personnel for the Seals has now offered a \$10,000,000, five-year

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ACC202-Ch9-Problem-1 - Name Instructor Date Course...

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