What offer should Steve Luke take? What is the total value of each offer?

To determine which contract Luke should take, we need to calculate the present value of each offer using a discount rate. Let's assume a discount rate of $10\%.$

Offer $2$

$$203,210$ 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 $40$