Tirade Owens, a professional athlete, currently has a contract that will pay him a large amount in the first year of his contract and smaller amounts thereafter. He and his agent have asked the team to restructure the contract. The team, though reluctant, obliged. Tirade and his agent came up with a counteroffer. What are the present values of each of the three alternatives below using a 14 percent discount rate? Which of the three has the highest present value? Year Current Contract Teams Offer Counteroffer

1 $8,125,000 $4,000,000 $5,250,000

2 $3,650,000 $3,825,000 $7,550,000

3 $2,715,000 $3,850,000 $3,625,000

4 $1,822,250 $3,925,000 $2,800,000