Sally Hamilton has performed well as chief financial officer of the Maxtech Comp
ID: 2492290 • Letter: S
Question
Sally Hamilton has performed well as chief financial officer of the Maxtech Computer Company and has earned a bonus. She has a choice among the followig three bonus plans:
You should use Future Value tables to compare all three of the investments.
A $50,000 cash bonus paid now.
A $10,000 annual cash bonus to be paid each year over the next six years, with the first $10,000 paid now.
A three-year $22,000 annual cah bonus with the first payment due three years from now.
Sally can earn a 6% annual return on her investments.
Evaluate the three alternative bonus plans, posting your questions and insights.
Explanation / Answer
Plan 3 is the best plan
Plan 1 Particulars Year Amount PVF @ 6% PV Bonus paid today 0 50000 1 50000Related Questions
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