Homework Help Question & Answers

Suppose a college junior is considering whether to declare himself eligible for the NFL draft. He...

Suppose a college junior is considering whether to declare himself eligible for the NFL draft. He expects to earn a salary of $1 million/year by declaring early. If he waits until after his senior year he expects his salary to be $1.1 million. In both cases, he will sign a 2-year contract and plans to retire when this contract expires. His personal discount rate is 5%.

The present discounted value of entering the draft early is?

0 0
Add a comment
Answer #1

Present discounted value as a junior / entering the draft early is
= 1/(1 + 5%) + 1/(1 + 5%)^2
= 1.86 million
This is the required value.

Add a comment
Know the answer?
Add Answer to:
Suppose a college junior is considering whether to declare himself eligible for the NFL draft. He...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coin

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • I need help. I am totally lost

    In his senior year at a major midwestem university, Billy Wilson had been the third runner-up for the fabled Heisman Trophy. The trophy goes to the outstandingfootball player in America and is presented annually by the New York Athletic Club. During the past football season, Wilson had run for over 1,500 yards and scored 18touchdowns. He had also caught 41 passes coming out of the backfield. His time in running the 40-yard dash, which professional scouts consider to be extremelyimportant,...

  • 1. Which of the following is true about a promissory estoppel? A) It is invoked in...

    1. Which of the following is true about a promissory estoppel? A) It is invoked in cases having incompetent parties. B) It permits a court to order enforcement of a contract that lacks consideration. C) It allows for a party to claim goods that were never paid for. D) It is invoked in cases that involve a promissory note. 2. Which of the following is true for a minor under the infancy doctrine? A) A minor is bound to the...

  • he Dilemma The story of Phar-Mor shows how quickly a company that built its earnings on...

    he Dilemma The story of Phar-Mor shows how quickly a company that built its earnings on fraudulent transactions can dissolve like an Alka-Seltzer. One day, Stan Cherelstein, the controller of Phar-Mor, discovered cabinets stuffed with held checks totaling $10 million. Phar-Mor couldn’t release the checks to vendors because it did not have enough cash in the bank to cover the amount. Cherelstein wondered what he should do. Background Phar-Mor was a chain of discount drugstores, based in Youngstown, Ohio, and...

  • Read the Article posted below, then answer the following questions: 1. As a junior member of...

    Read the Article posted below, then answer the following questions: 1. As a junior member of your company’s committee to explore new markets, you have received a memo from the chairperson telling you to be prepared at the next meeting to discuss key questions that need to be addressed if the company decides to look further into the possibility of marketing to the BOP segment. The ultimate goal of this meeting will be to establish a set of general guidelines...

  • please help with this. CASE 35 KFC and the Colonel* Introduction The story of Kentucky Fried...

    please help with this. CASE 35 KFC and the Colonel* Introduction The story of Kentucky Fried Chicken is the story of Colonel Harland Sanders. The Colonel," however, was not a real colonel and Sanders was not even a Kentucky native. He was nevertheless, a prime example of the resiliency of the human spirit because he demonstrated that, even at 66 years of age, after a series of financial fiascoes, it is still not too late to become a business success...

  • This year Evan graduated from college and took a job as a deliveryman in the city....

    This year Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $68,500 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below: Cost of moving his possessions to the city (125 miles away) Interest paid on accumulated student loans Cost of purchasing a delivery uniform Contribution to State University deliveryman program $1,200 2,840 1,440 1,320 Calculate Evan's AGI and taxable income...

  • Hi, i just need the highlighted ones. Thank you! CHAPTER 1 Understanding Personal Finance 33 LET'S...

    Hi, i just need the highlighted ones. Thank you! CHAPTER 1 Understanding Personal Finance 33 LET'S TALK ABOUT IT 1. Economic Growth. What tpes of federal government Federal Reserve. Describe some economic circumstances that might persuade the Federal Reserve to lower short-term inter- ctfoets to help stimulate economic growth affect 2 The Business Cycle. Where is the United States in the economic cycle now, and where does it seem to be heading? List some indicators that suggest in which direction...

  • Please read the facts of the case and prepare answers for the following questions : 1...

    Please read the facts of the case and prepare answers for the following questions : 1 – What is the relevance of the $2,000 monthly payment to Dave Verden on the analysis of Jones’ financing needs? 2 – What metrics could you use to compare the historical financial results for Jones with the projected financial results under the four defined scenarios? 3 – Other than financing needs, what other issues should Jones address as he considers the different growth scenarios?...

  • You might be familiar with Crazy Eddy, an owner of the “Crazy Eddy’s” home electronics stores...

    You might be familiar with Crazy Eddy, an owner of the “Crazy Eddy’s” home electronics stores that used to exist when you were younger (though maybe too young to remember). Some of the larger superstores like Best Buy and Circuit City moved in and began squeezing Eddy. As it turned out his tagline, “where the prices are insane,” was quite true, and he was forced out of business. Unbeknownst to many, Eddy was an avid skier, and his desire to...

  • Read below and answer, Why does a business that has profit of $30,000 per year need...

    Read below and answer, Why does a business that has profit of $30,000 per year need a bank loan? Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank-a local one- branch bank-to $250,000 in 2006. The maximum loan that Metropolitan would make...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.