Ask Question, Ask an Expert


Ask Basic Finance Expert

1) European soccer team is thinking buying a star player in transfer market. To buy player, team would have to pay transfer fee to player’s present team of= $9M. Team is also contractually obligated to pay player a salary of= $2M per year for next six years. Though, player is expected to raise team’s performance by four wins per year. Historical data illustrates each extra win is worth approximately= $1.5M in revenues from ticket sales. Suppose transfer fee can be depreciated in the straight line manner over life of contract, but that the yearly salary can’t be depreciated. Team’s tax rate is= 30% and applicable discount rate is= 4%. Should the team purchase the player?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914969

Have any Question? 

Related Questions in Basic Finance

1 the beta 079 for network service provider verisign inc

1. The β = 0.79 for network service provider VeriSign, Inc. (VRSN), and β = 1.34 for video game supplier Electronic Arts Inc. (ERTS). If the market return is expected to be 10% and the risk-free rate is 4%, calculate the ...

How has the nyse responded to the technological challenge

How has the NYSE responded to the technological challenge posed by NASDAQ and the trend toward more global financial markets?

Conseco inc has a debt ratio of 055 what are the companys

Conseco, Inc., has a debt ratio of 0.55. What are the company's debt-to-equity ratio and equity multiplier?(Round your answers to 2 decimal places, e.g.12.25.)

Assignment1 describe the role that the winners curse may

Assignment 1. Describe the role that the "winner's curse" may play in the underpricing of IPOs. 2. a. Does a rights offer cause a share price decrease? Why or why not? b. How are existing shareholders affected by a right ...

What are nondeposit liabilities give some exampleswhat are

What are nondeposit liabilities? Give some examples. What are negotiable CDs? How do nondeposit liabilities differ from negotiable CDs? What are retail sweep accounts? What are credit derivatives?

Davenport corporations last dividend was 700 and the

Davenport Corporation's last dividend was $7.00 and the directors expect to maintain the historic 3 percent annual rate of growth. You plan to purchase the stock today because you feel that the growth rate will increase ...

Twice a year for 15 years warren ford invested 1700

Twice a year for 15 years, Warren Ford invested $1,700 compounded semiannually at 6% interest. What is the value of this annuity due?

I need your help with the below three assignment no need

I need your help with the below three assignment. No need for "Executive Summary" just start with introduction, please. Assignment 1: Module 01 - Introduction and Framework for Sustainability Which of the nine principles ...

To promote sales a retailer special scratch-coupons when

To promote sales a retailer special scratch-coupons. When the shopper makes a purchase, the clerk scratches o↵ the covering to reveal the amount of the discount. The discount is 10%, 30% and 50% of the initial amount. 7/ ...

It computers purchased computer chips from computech a

IT computers purchased computer chips from computech, a French electronics and was billed FF250 million payable in three months. Currently the spot exchange rate is FF100/$ and the three months money market interest rate ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate