A rookie quarterback is negotiating his first NFL contract. His opportunity cost is $8\%.$ He has been offered three possible $4-$year contracts. Payments are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:

$1234$

Contract $1$ $$3,500,000$ $$3,500,000$ $$3,500,000$ $$3,500,000$

Contract $2$ $$2,000,000$ $$3,000,000$ $$4,500,000$ $$5,500,000$

Contract $3$ $$6,000,000$ $$1,500,000$ $$1,500,000$ $$1,500,000$

As his adviser, which contract would you recommend that he accept?

Select the correct answer.

a$.$ Contract $1$ gives the quarterback the highest present value; therefore, he should accept Contract $1.$

b$.$ Contract $3$ gives the quarterback the highest present value; therefore, he should accept Contract $3.$

c$.$ Contract $3$ gives the quarterback the highest future value; therefore, he should accept Contract $3.$

d$.$ Contract $2$ gives the quarterback the highest present value; therefore, he should accept Contract $2.$

e$.$ Contract $1$ gives the quarterback the highest future value; therefore, he should accept Contract $1.$