Carmelo Melo Anthony has decided to retire from the NBA and will coach the Richmond Elite ABA team post-retirement. The Richmond Elite have offered Melo 3 payment schemes to choose between. Each involves a signing bonus payable immediately and three years of salary payable at the end of each year. The first scheme calls for Melo to receive a signing bonus of $3 million and a salary of $700,000 million per year for 3 years. The second calls for him to receive a signing bonus of $2 million and an annual salary of $1.2 million per year. The third scheme calls for Melo to receive a signing bonus of $1 million and annual salaries of $1.2 million, $1.6 million, and $2 million. Melo seeks your advice on this choice of payment schemes. Advise him on which scheme to pick. Use an annual interest rate of 8% to evaluate the alternatives. Bonus challenge: Fixing the signing bonus of Option 1 at $3 million, what signing bonus amounts for the other two options would make Melo exactly indifferent among the contract options?