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...



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



$3,500,000



$3,500,000



1



Annual Salary



$700,000



$850,000



$775,000



2



Annual Salary



$750,000



$800,000



$775,000



3



Annual Salary



$800,000



$750,000



$775,000



4



Annual Salary



$850,000



$700,000



$775,000




Jun 08, 2022
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