1 Sarfaraz Ahmed is negotiating sports employment contract. His opportunity cost is 12%. He has been offered three possible 4-year contracts. Payments are in Pakistani rupees and are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:

Contract

Year 1

Year 2

Year 3

Year 4

Contract 1

3 Million

3 Million

3 Million

3 Million

Contract 2

2 Million

3 Million

4 Million

5 Million

Contract 3

7 Million

1 Million

1 Million

1 Million

As his financial adviser, which contract would you recommend that he accept? (Total Marks 2.5)