am Bradford, a top five draft pick of the St. Louis Rams, and his agent are evaluating three contract options. Each option offers a signing bonus and a series of payments over the life of thecontract. Bradford uses a 9.65 percent rate of return to evaluate the contracts. Given the cash flows for each option below, find the present value of each alternative.

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

(If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your input answers to the nearest dollar.)

a. Find the present value of each alternatives:

Present value of Option A -? Present value of Option B -? Present value of Option C -?

b. Which option should he choose ?

He should choose-? Option C Option A Option B