Pearl Hardy recently rejected a $19,863,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $7,363,000 and annual payments of $2,500,000. To sweeten the deal, the president of player personnel for the Seals has now offered a $22,021,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of 5 years.

Year 1		$2,523,000
Year 2		2,600,000
Year 3		2,733,000
Year 4		2,800,000
Year 5		2,946,000
Year 5 balloon payment		8,419,000
Total		$22,021,000

Click here to view factor tables Suppose you are Hardys agent and you wish to evaluate the two contracts using a required rate of return of 14 percent. 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
Present value of new contract

In present value terms, the second contract is

Better or not better? than the old one.