ANSWER THE FOLLOWING QUESTION. THIS IS ONE PROBELM

- A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 10%. 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: Select the correct answer. a. Contract 1 gives the quarterback the highest present value; therefore, he should accept Contract 1. b. Contract 2 gives the quarterback the highest present value; therefore, he should accept Contract 2. c. Contract 3 gives the quarterback the highest future value; therefore, he should accept Contract 3. d. Contract 3 gives the quarterback the highest present value; therefore, he should accept Contract 3. - Kristina just won the lottery, and she must choose among three award options. She can elect to receive a lump sum today of $60 million, to receive 10 end-of-year payments of $9.3 million, or to receive 30 end-of-year payments of $5.4 million. If she thinks she can earn 7% percent annually, which should she choose? -Select-She should accept the 30-year payment option as it carries the highest present valueshe should accept the lump-sum payment option as it carries the highest present valuenshe should accept the 10-year payment option as it carries the highest present valueshe should accept the lump-sum payment option as it carries the highest future valuenter 1 If she expects to earn 8% annually, which is the best choice? -Select-She should accept the lump-sum payment option as it carries the highest present valuenshe should accept the 30-year payment option as it carries the highest present valuesibe should accept the 10-year payment option as it carries the highest present values She should accept the lump-sum payment option as it carries the highest future value Item 2 If she expects to earn 9% annually, which option would you recommend? -Select-She should accept the lump-sum payment option as it carries the highest present valuenshe should accept the 30-year payment option as it carries the highest present valuesibe should accept the 10-year payment option as it carries the highest present values She should accept the 30-year payment option as it carries the highest future valuestem 3 Explain how interest rates influence her choice. -Select-The higher the interest rate, the more valuable it is to get money rapidlv-The lower the interest rate, the more valuable it is to get money rapidfv-Tba higher the discount rate, the higher the more distant cash flows are valued. Interest rates do not influence the optimal choice in any wavinterest rates and the present value of cash flows are positively related. Find the amount to which $700 will grow under each of these conditions: a. 14% compounded annually for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent. b. 14% compounded semiannually for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent. c. 14% compounded quarterly for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent. d. 14% compounded monthly for 3 years. Do not round intermediate calculations. Round your answer to the nearest cent. e. 14% compounded daily for 3 years. Assume 365 -days in a year. Do not round intermediate calculations. Round your answer to the nearest cent. f. Why does the observed pattern of FVs occur