Steve Hawke Is a Football Star Who Has Been Offered

Multiple Choice

Steve Hawke is a football star who has been offered contracts by two different teams.The payments (in millions of dollars) under the two contracts are shown below:​​​ $\begin{array}{lcc}&\text { Team A}&\text { Team B}\\\text { Year } & \text { Cash Payment }& \text { Cash Payment } \\\hline & \$ 8.0 & \$ 2.5 \\1 & 4.0 & 4.0 \\2 & 4.0 & 4.0 \\3 & 4.0 & 8.0 \\4 & 4.0 & 8.0\end{array}$ ​Steve plans to accept the contract that provides him with the highest NPV.At what discount rate would he be indifferent between the two contracts?

A) 10.85%
B) 11.35%
C) 12.66%
D) 13.98%