Consider the following scenario:
A rookie football player is given a 6-year contract and he can decide the terms of payment. As his financial advisor, it’s up to you to help him make the most profitable decision by choosing Option A, Option B, or Option C.
Showing all work, calculate the total money earned at the end of six years for the following scenarios:
a.Option A: $1,700,000 base salary with an annual increase of $70,000 starting the second year
b.Option B: $1,700,000 base salary with an annual increase of 2% per year beginning the second year
c.Option C: $1,500,000 base salary with an annual increase of 9% per year starting with the second year
Which contract would you suggest the rookie take? WHY (use mathematics and logic to support your answer)
If the contract were for 8 years, would your recommendation change? WHY or why not? (Use mathematics and logic to support your answer)