Reference no: EM132642209

Jordi Referren was seeking a professional soccer contract in Europe. He has been offered a 3-year contract with Stripe Albion football club whereby his contract will be based on whether the club makes the finals in their local soccer league this year in Monrovia. The likelihood of this happening is 32.5%. The annual contract from Stripe Albion is either $800 000 if they make the finals or $400 000 if not successful.
Jordi has also been offered a 3-year contract with White Rovers football club whereby his contract will be based on whether the club makes the finals, makes the grand final or wins the overall championship in Turmenistan. The annual contract from White Rovers is based on amounts of $325 000 if they do not make the grand final, $410 000 if they make the grand final and lose and $900 000 if they win the overall championship. The likelihood of not making the grand final is 60%, making and losing the grand final of 30% and making and winning the grand final of 10%.

Required:

Question 1: Advise Jordi, based only on the financial information provided, which of the club contracts he should accept.