A football is evaluating three contract options given to him. Each option offers a bonus and a series of payments over the life of the contract. The rate of return is 7.25% compounded anually to evaluate the options. Which contract should be chosen? Show your calculations.
Year
Cash flow
Ever Football Club
Heal Football Club
Airy Football Club
0
bonus
$3,500,000
1
Annual Salary
$700,000
$850,000
$775,000
2
$750,000
$800,000
3
4
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