Homework Answers
| Statement showing Cash flows | Quarterback | Receiver | ||||
| Particulars | Time | PVf 9% | Amount | PV | Amount | PV |
| Cash inflows | - | 1.0000 | - | - | 5,000,000.00 | 5,000,000.00 |
| Cash inflows | 1.00 | 0.9174 | 3,200,000.00 | 2,935,779.82 | 2,800,000.00 | 2,568,807.34 |
| Cash inflows | 2.00 | 0.8417 | 3,200,000.00 | 2,693,375.98 | 2,800,000.00 | 2,356,703.98 |
| Cash inflows | 3.00 | 0.7722 | 3,200,000.00 | 2,470,987.14 | 2,800,000.00 | 2,162,113.74 |
| Cash inflows | 4.00 | 0.7084 | 3,200,000.00 | 2,266,960.68 | 2,800,000.00 | 1,983,590.59 |
| Cash inflows | 5.00 | 0.6499 | 3,200,000.00 | 2,079,780.44 | 2,800,000.00 | 1,819,807.88 |
| Cash inflows | 6.00 | 0.5963 | 3,200,000.00 | 1,908,055.45 | 2,800,000.00 | 1,669,548.52 |
| PV of Cash Inflows =PVCI | 14,354,939.49 | 17,560,572.05 | ||||
| a) PV of Quarterback contract | 14.35 million | |||||
| b) PV of receiver contract | 17.56 Million | |||||
| c) Receiver as higher PV | ||||||
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