You are the financial advisor for a musician who is in the process of negotiating a recording contract.The company is offering him two possible contracts.With each contract the first payment is made upon receipt (year 0).If the musician discounts cash flows at 4%, which of the two contracts below has the highest net present value?

Contract 1 Contract 2

Year 0(today) $2.0million $2.5million

Year 1 1.5million 1.5million

Year 2 1.5million 1.0million

Year 3 1.5million 1.0million

NPV ________ ________