Chapter $11$: Capital Budgeting and Time Value of Money

Question #$5$: Time Value of Money $(10$min $)$

An NBA basketball player is offered the choice of two $4-$year salary contracts, contract $x$ for $$2\mathrm{.}85$ million and contract $Y$ for $$2\mathrm{.}72$ million:

$\backslash$table$[[,$Contract X$,$Contract Y$],[$End of year $1,$$$250,000,$$$550,000$