Tirade Owens, a professional athlete, currently has a contract that will pay him a large amount in the first year of his contract and smaller amounts thereafter. He and his agent have asked the team to restructure the contract. The team, though reluctant, obliged. Tirade and his agent came up with a counter offer. What are the present values of each of the contracts using a 14 percent discount rate? Which of the three contacts has the highest present value?

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Year Current Contract Team's Offer Counteroffer $4,000,000.00 S5,250,000.00 S3,650,000 S3,825,000.00 S7,550,000.00 $2,715,000 S3,850,000.00 S3,625,000.00 $1,822,250 S3,925,000.00 S2,800,000.00