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Question - A famous quarterback just signed a $16.5 million contract providing $3.3 million a year for 5 years. A less famous receiver signed a $15.5 million 5-year contract providing $4 million now and $2.3 million a year for 5 years. The interest rate is 10%.
a. What is the PV of the quarterback's contract?
b. What is the PV of the receiver's contract?
c. Who is better paid? Quarterback or Receiver?
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