as a result of a Slowdown in operations, Tradewinds stores is offering employees
ID: 2532850 • Letter: A
Question
as a result of a Slowdown in operations, Tradewinds stores is offering employees who have been terminated a severance package of $101,000 cash paid today. 100 $1,000 to be paid in one year, and an annuity of $37,000 to be paid each year for 8 years. What is the present value of the package is assuming an interest rate of 11%?
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CH 11 Qutz Instructions t help Question 7 (of 10) Save & Exit Submit Time remaining 0:39-23 7 As a result of a slowdown in operations, Tradewind Stores is offering employees who have been terminated a severance package of $101,000 cash paid today $101,000 to be paid in one year, and an annuity of $37,000 to be paid each year for 8 years What is the present value of the package assuming an interest rate of 11 percent? Annuity of$1.) (Use appropriate factor(s) from the tables provided. Round the final answer to nearest whole dollar.) Present Value Macro I Sc2 1080 30 29. Chapter 10 test bank. Microsoft Study Notes WordExplanation / Answer
Year Cash outflows PVF @ 11% Present values 0 -101000 1 -101000 1 -101000 0.900901 -90991 2 -37000 0.811622 -30030 3 -37000 0.731191 -27054.1 4 -37000 0.658731 -24373 5 -37000 0.593451 -21957.7 6 -37000 0.534641 -19781.7 7 -37000 0.481658 -17821.4 8 -37000 0.433926 -16055.3 9 -37000 0.390925 -14464.2 Present value of outflows -363528
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