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CASE Billy Wilson, All American In his senior year at a major Midwestern university, Billy Wilson had been the third runner up for the famed Heismann...

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Canadian Football League: \$1,100,000 immediate signing bonus \$2,000,000 at the end of each year for the next three years. Required Assignment 1. Calculate the present value of the four (4) contract proposals. 2. Which of the four contracts has the highest present value, and what is that amount? Assume that the cash flows will be discounted using a 10 percent interest rate. 3. If the discount rate used was 7 percent instead of 10 percent, how might that change your answer? Would the resulting present values you calculated in #2 above be higher or lower – explain your answer. 4. Given your answers to #2, how much could Billy pay himself for the next 40 years assuming a 10% interest rate? Calculate the answer using all four (4) football conracts.
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Case: Billy Wilson, All american
1 Present values of the four proposals
Contract offer 1
Immediate signing bonus
At the end of each of the next
5 years \$900,000
\$850,000 Discount rate (r ) 10%...

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