The Hazards, a professional baseball team, want to sign pitcher Alex McScoob to a two-year contract but, because of salary cap limitations, can only pay $8 million for the first year (Alex's market value is $10 million per year). The Hazards offer to pay $8 million in year 1 and $13 million in year 2. Should Alex sign the contract?
Multiple Choice
Yes, but only if the interest rate is less than 10 percent.
Yes, but only if the team expects to be successful.
Yes, Alex is better off financially regardless of the interest rate.
Yes, if the interest rate is less than 50 percent.