A highly recruited college basketball player signs a four-ye…

A highly recruited cоllege bаsketbаll plаyer signs a fоur-year cоntract worth a reported $40 million. The contract includesan immediate signing bonus of $5 million. In addition, the player will receive $8 million at the end of year 1, $12 million at the end of year 2, and $15 million at the end of year 4. If the appropriate discount rate is 12 percent, is this contract worth $40 million today? If not, what is its present value?