NovakHardy recently rejected a $23,200,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $8,700,000and annual payments of $2,900,000. To sweeten the deal, the president of player personnel for the Seals has now offered a $25,340,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of five years.

Year 1 $2,900,000

Year 2 2,980,000

Year 3 3,060,000

Year 4 3,140,000

Year 5 3,400,000

Year 5 balloon payment 9,860,000

Total $25,340,000

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Suppose you are Hardy's agent and you wish to evaluate the two contracts using a required rate of return of15percent. In present value terms, how much better is the second contract?(Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answers to 0 decimal places, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Present value of old contract _______________enter a dollar amount

Present value of new contract ___________________ enter a dollar amount