Q No. 1 Sarfaraz Ahmed is negotiating sports employment contract. His opportunity cost is 12%. He has been offered three possible 4-year contracts. Payments are in Pakistani rupees and are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:

Contract	Year 1	Year 2	Year 3	Year 4
Contract 1	3 Million	3 Million	3 Million	3 Million
Contract 2	2 Million	3 Million	4 Million	5 Million
Contract 3	7 Million	1 Million	1 Million	1 Million

As his financial adviser, which contract would you recommend that he accept? (Total Marks 2.5)

Answer rating: 100% (QA)

Contract 1 cost of capital 12 Present value of 1 year ca... View the full answer