At the University Academy, you can sign up to pay P105,000 now, or over a 10-year period, for the right to buy top seats for UA games during the next 30 years. In return, the seats themselves will stay locked in at current-year prices. Season game tickets in tier 1 are currently selling for P350 each. A UA fanatic plans to purchase the mortgage along with a current-season ticket and pay for both now, then buy a ticket each year for the next 30 years. What is the total present worth of the pricing plan at an interest rate of 10% per year?

At the University Academy, you can sign up to pay P105,000 now, or over a 10-year period, for the right to buy top seats for UA games during the next 30 years. In return, the seats themselves will stay locked in at current-year prices. Season game tickets in tier 1 are currently selling for P350 each. A UA fanatic plans to purchase the mortgage along with a current-season ticket and pay for both now, then buy a ticket each year for the next 30 years. What is the total present worth of the pricing plan at an interest rate of 10% per year?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter19: The Problem Of Adverse Selection

Section: Chapter Questions

Problem 19.1IP

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