Reference no: EM132669627

FIFA rules regarding players contracts are very interesting. If a player wishes to break his or her contract, the purchasing club must pay the player's club four times the player's annual salary multiplied by the number of years left on the contracts. The player must pay 10% of this amount personally and the agent must also pay 10% of this same amount from his pocket. Consider Fashion G Sakala who earns £120,000 a week and has 4 years of his contract left with Manchester City.

Problem A.) calculate how much the Fashion G. Sakala would personally have to pay if he is left with 4 years remaining, 3 years remaining, 2 years remaining and 1 year remaining?

Problem B.) if the appropriate annualised discounted rate is 8%, what is the present value of him breaking the contract with 4, 3, 2, 1 and 0.

Problem C.) Assume you're the Fashion G. Sakala's agent and can personally earn £5 million today from getting him to sign a pre-contract to join Real Madrid in future. Calculate the net present value to you if thee player left with 4 years remaining, 3 years remaining, 2 years remaining and 1 year remaining?

Problem D.) Assume that you are a new financial manager of a bed mattress firm, Fairy Tale lullaby Ltd. The firm has always used payback period and accounting rate of return techniques to appraise new investments. With your trusty copy of "corporate finance" to hand, you believe that other methods maybe more appropriate for the firm. report to the owners of Fairy tale Lullaby Ltd reviewing the different methods that can be used in investment appraisal together with their strengths and weakness. Comment on any practical is that Fairy Tale Lullaby may face in implementing these methods.