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I have to prepare two separate counteroffers for a team and they have to be structured...

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Finance

I have to prepare two separate counteroffers for a team and theyhave to be structured differently, can't be the same. I have tofigure out how to make sure it's good for the player. Having asigning bonus up front would be good in one of them but not surehow to structure that. There has to be enough deferred compensationover the 4 years so that the team can financially afford it

It has to meet the following four guidelines.

4 year term

Contract total PV (present value) must have a $15.5M-$16M range.(Used a 5.5% discount rate i=.05)

The player must earn AT LEAST ($600,000) In each of the playingyears

Build in a deferred compensation pattern.

Answer & Explanation Solved by verified expert
3.7 Ratings (338 Votes)
Plan 1Signing bonus 13500000Yearly payment 600000The PV of the yearly payments is calculated using PV function inExcel rate 55 discount ratenper 4 4 year    See Answer
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