Correct! $$850,0003\mathrm{.}791=$

$$3,222,350$

Steve

Ok$,$ last part! We've calculated the

pieces separately, just need to

bring it all together. What is the

present value of the total

contract?

$$5,150,000$

$$3,222,350$

$$4,157,070$

Offer $1$

$$934,720$ immediate signing bonus

$$850,000$ at the end of each year for the next $5$ years

Offer $2$

$$217,360$ immediate signing bonus

$$100,000$ at the end of Years $1$ through $4$

$$150,000$ at the end of Years $5$ through $10$

$$1,000,000$ and the end of Years $11$ through $40$

Offer $3$

$$1,006,944$ immediate signing bonus

$$500,000$ at the end of Year $1$

$$1,000,000$ at the end of Year $2$

$$1,500,000$ at the end of Year $3$

$$2,500,000$ at the end of Year $4$

$$184,720$ bonus for any year Luke is selected to play in the Pro Bowl All Star game $25\%$

probability in each year$)$

what is the present valuue of all the contracts

A$.$ $$5,150,000$

B$.$ $$3,222,350$

C$.4,157,070$