/co Secure l https://www. MGMT 273 Fall Quiz: Chapter 5 Quiz Submit Qui This Que

Question

/co Secure l https://www. MGMT 273 Fall Quiz: Chapter 5 Quiz Submit Qui This Question: 1 pt 11 of 13 (10complete) This Quiz: 13 pts possibie You have been offered a job with an unusual bonus structure. As long as you stay with from now. What is the present value of this incentive if you plan to ork for the company for 42years and the rte est atei 56% (EARP N round any intermediate steps less than six decimal places) the firm, you will get an extra $67,000 every seven years, starting seven years Be cant otto

Explanation / Answer

Calculation of present value of incentive Year Incentive Discount Factor @ 5.6% Present Value 7 $67,000 0.682893 $45,754 14 $67,000 0.466343 $31,245 21 $67,000 0.318462 $21,337 28 $67,000 0.217475 $14,571 35 $67,000 0.148512 $9,950 42 $67,000 0.101418 $6,795 Present Value of Incentive $129,652 The present value of this incentive is $1,29,652

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