Case Study: You were recently hired as an agent for Carlos Alcaraz, the world number 1 male tennis player, to evaluate his three new contract options. Each option offers a 2 signing bonus and a series of payments over the life of the contract. Carlos wants to use a 10.25 percent rate of return to evaluate the contracts. Given the cash flows for each of the following options, which one would you recommend to him? Show your work. (5 points)

Year Cash Flow Type Option A Option B Option C 0 Signing Bonus $3,100,000 $4,000,000 $4,250,000 1 Annual Salary $ 650,000 $ 825,000 $ 550,000 2 Annual Salary $ 715,000 $ 850,000 $ 625,000 3 Annual Salary $ 822,250 $ 925,000 $ 800,000 4 Annual Salary $ 975,000 $1,250,000 $ 900,000 5 Annual Salary $1,100,000 $1,000,000 6 Annual Salary $1,250,000