The Kansas City Chiefs are deciding whether to offer a contract extension to Tyreek Hill. Suppose the contract would give him a signing bonus of $20 million up front (i.e. today) and $25 million annually over the next five years. If the expected cash inflows from signing him are $35 million, $30 million, $29 million, $28 million, and $27 million, respectively over the next five years, the expected IRR of signing Tyreek Hill is ________. If the Kansas City Chiefs, required rate of return is 10 percent, the Kansas City Chiefs ________ accept this contract. Based on the above information (using the Chiefs discount rate), the computed net present value of this contract offer must be ___________. (Hint: you should net out the inflows and outflows when calculating the IRR).

8.73%; should not; negative

11.27%; should; positive

8.73%; should; negative

11.27%; should not; negative