(Solution Download) A top-five draft pick of FC Football, and his agent are evaluating three contract options. Each...


A top-five draft pick of FC Football, and his agent are evaluating three contract options. Each option offers a signing bonus and a series of payments over the life of the contract. Paul uses a 10.25 per cent rate of return to evaluate the contracts. Given the cash flows for each option below, which one should he choose? Year Cash Flow Type Option A Option B Option C 0 Signing Bonus ?3,100,000 ?4,000,000 ?4,250,000 1 Annual Salary ?650,000 ?825,000 ?550,000 2 Annual Salary ?715,000 ?850,000 ?625,000 3 Annual Salary ?822,250 ?925,000 ?800,000 4 Annual Salary ?975,000 ?1,250,000 ?900,000 5 Annual Salary ?1,100,000 ?1,000,000 6 Annual Salary ?1,250,000 Additional Requirements Level of Detail: Show all work Other Requirements: please show workings out on excel

 







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