Offer $1$

$$947,765$ immediate signing bonys

$$4650,000$ at the end of each year for the next $5$ years

Offor $2$

$$223,803$ immediate signing benus

$$100,000$ at the end of Years $1$ ihrough a

$$150,000$ at the end of Years $5$ through $10$

$$4,000,000$ and the end of Yedre $11$ ihrough $40$

Correctl The solution is to treat it like a A

year annuity and discount the total by the

probability that Luke will play

$9197,765+3,170+0,25$

$=$$$156,729$

What is the tetal value of $c$ intract effer

H$3?$

Offor $3$

$$1,009,563$ immediate signing benus

$$500,000$ at the end of Year I

$$1,000,000$ at the end of Year $2$

$$1,500,000$ at the end of Year $3$

$$2,500,000$ at the end of Year A

$$197,765$ bonus for any year Luke is selected to play in the Pro Bowl All star game $(25\%$ probability in

each year$)$

Ganadian Football League

$$1,147,765$ immediate signing benus

$$4,000,000$ at the end of Years $1$ through $3$

Only signing bonus is guaranteed $(80\%$ probability of being on leam each year$)$