Which is the better investment opportunity

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Reference no: EM13895673

Mr. Smith received two endorsement offers – Under Armour offers $50,000 to be paid in 5 years and Nike negotiated a long-term deal that called for yearly payments to Mr. Smith of $8,500 for 3 years. The risk of default with the Under Armour is higher, so a discount rate of 9% is applied as opposed to the 5% rate used for Nike. Which is the better investment opportunity? (Fill in the blank in order)

Present value of Under Armour is: _________________________________________

Present value of Nike is: _________________________________________________

The difference between two is: ____________________________________________

The better deal between two is: ____________________________________________

Reference no: EM13895673

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