1. An executive is to receive a $1,500,000 signing bonus today, $2,500,000 one year from now, $2,750,000 two years from now, and $3,200,000 three years from now. Assuming an annual discount rate of 12% and ignoring tax considerations, would the executive be better off receiving $7,500,000 today?

Answer rating: 100% (QA)

calculate the present value of the signing bonus installments and compare it to the lump sum offer t... View the full answer