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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This document was uploaded on 06/11/2009.

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

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