Suppose that Stephen Curry, a basketball player for the Golden State Warriors, will become a free agent at the end of this NBA season.

Third-year salary

$5 million

$3 million

The interest rate is 10%. Based on this information, which of the following is true?

a. Curry should take the Boston contract because it has a higher present value.

b. Curry should take the Portland contract because it has a higher present value.

c. Curry is indifferent between the two contracts because they are both worth $12 million.

d. Curry is indifferent between the two contracts because they are both worth $10.9 million.

(please show your analysis and calculation process)

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