A recently graduated college player is looking to be a Professional player. After the draft, his agent just call him with good news: He received three different offers from US Teams, and one more to play in the Canadian Football League. Here are the details:

1. If this player is your friend and asks for advice, what kind of analysis can be used to make a good decision?
2. Assuming a discount rate of 10%, calculate the PV of each offer, and make a decision based on it.
3. Are there other factors that should be considered before making this important decision?

Offer 1 $900,000 immediate signing bonus $850,000 at the end of each year for the next 5 years Offer 2 $200,000 immediate signing bonus $100,000 at the end of Years 1 through 4 $150,000 at the end of Years 5 through 10 $1,000,000 and the end of Years 11 through 40 Offer 3 $1,000,000 immediate signing bonus $500,000 at the end of Year 1 $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 4 $200,000 bonus for any year Luke is selected to play in the Pro Bowl All Star game (25% probability in each year) Canadian Football League $1,100,000 immediate signing bonus $2,000,000 at the end of Years 1 through 3 Only signing bonus is quaranteed (80% probability of being on team each year) Offer 1 $900,000 immediate signing bonus $850,000 at the end of each year for the next 5 years Offer 2 $200,000 immediate signing bonus $100,000 at the end of Years 1 through 4 $150,000 at the end of Years 5 through 10 $1,000,000 and the end of Years 11 through 40 Offer 3 $1,000,000 immediate signing bonus $500,000 at the end of Year 1 $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 4 $200,000 bonus for any year Luke is selected to play in the Pro Bowl All Star game (25% probability in each year) Canadian Football League $1,100,000 immediate signing bonus $2,000,000 at the end of Years 1 through 3 Only signing bonus is quaranteed (80% probability of being on team each year)