Determine the present value of each contract

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The following are actual contracts signed by athletes:

a. $25,000,000 contract, payable at $2,500,000 per year for 10 years.

b. $25,000,000 contract, payable at $1,000,000 per year for 25 years.

c. $25,000,000 contract, payable at $1,562,500 per year for 16 years.

Determine the present value of each contract and indicate which contract you would prefer to have. Assume a 12% interest rate.

Reference no: EM132154507

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