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This case study provides a real-life example of how Net Present Value can be used for making financial decisions.
1. How is the concept of Net Present Value used to solve the quantitative answers for this case? (I have already uploaded the answer, please look at the Excel Spreadsheet that I uploaded for you carefully). Give 3 reasons why Net Present Value is important in solving this case. Please do not write the basic concept explained about what is “Net Present Value.”
2. Review the assumptions (see Exhibit TN-3) for this case. (Use materials provided in this case or additional research to support your answers.)
Answer the following questions:
a. Do you think that the increased franchise value is realistic?
b. What are your thoughts on Broadcast revenue?
c. Choose 3 of the following assumptions and explain whether you think they are realistic or not.
i. Increase in average number of wins
ii. Improved chance of reaching ALCS?
iii. ALCS incremental revenue.
iv. The need for Contract Insurance
v. Franchise Value Revenue multiple
3. Do you think that hiring A-Rod was the right decision after all? Explain your answer with facts and assumptions.
Grading will include depth and quality of answer, justification and analysis.
Your written report should be clear so that the professor understands your answers.
Your report should be no more than 2 pages single-spaced.
All References must be cited.
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