Question

You are approaching your 10-year anniversary of employment, and the company your work for has promised...

You are approaching your 10-year anniversary of employment, and the company your work for has promised a bonus of $20,000 in two years’ time if you reach performance targets. In addition, the company has promised you another bonus of $40,000 seven years from today if your high standards of work performance continue. Interest rates are currently 5% and will stay at this level for four years. After four years, interest rates are expected to rise to 8%.

What is the present value of the promised bonuses?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A rich aunt has promised you $ 5000 one year from today. In​ addition, each year...
A rich aunt has promised you $ 5000 one year from today. In​ addition, each year after​ that, she has promised you a payment​ (on the anniversary of the last​ payment) that is 3 % larger than the last payment. She will continue to show this generosity for 10 ​years, giving a total of 10 payments. If the interest rate is 5 %​, what is her promise worth​ today?
You start your first day at work as a supervisor in a manufacturing plant. You call...
You start your first day at work as a supervisor in a manufacturing plant. You call your employees together to discuss your vision for the future of the department. You start out by talking about how well trained they are and how proud you are to be working with them, but the last supervisor got fired because your group was under performing. You talk about the importance of motivation and end up discussing the potential end of the year pay...
You work as an expert in a company that is planning advertising. Your annual budget is...
You work as an expert in a company that is planning advertising. Your annual budget is 8.000.000 TL. You advertise on two television channels (Channel W and Channel T). Channel T's one-minute advertising fee is 20,000 TL, while Channel W's one-minute advertising fee is 45,000 TL. Due to the company policy, Channel W must be advertised at least half of the advertising time given to Channel T. According to the view rates, the advertisements given Channel W are watched at...
A. You buy a 10-year US Treasury Bond with a coupon interest rate of 5% and...
A. You buy a 10-year US Treasury Bond with a coupon interest rate of 5% and Face Value of $1,000. You decide to sell your bond four years later when market interest rates have fallen to 4%. Find the selling price of the bond. B. Calculate the Annualized Holding Period Return on the investment. Show your work.
A. You buy a 10-year US Treasury Bond with a coupon interest rate of 5% and...
A. You buy a 10-year US Treasury Bond with a coupon interest rate of 5% and Face Value of $1,000. You decide to sell your bond four years later when market interest rates have fallen to 4%. Find the selling price of the bond. B. Calculate the Annualized Holding Period Return on the investment. Show your work.
For the past decade, your company has encouraged sales teams to work together in a cooperative...
For the past decade, your company has encouraged sales teams to work together in a cooperative and cohesive manner. This initiative is closely aligned with one of the company’s core values: “Together, we achieve more.” To motivate sales associates to cooperate with one another in their respective teams, at the end of each fiscal year, team managers evaluate their respective teams by rating them on a number of behavioral dimensions related to cooperation and cohesion. Teams that receive high marks...
Management at the company you work for is offering to pay for you to complete your...
Management at the company you work for is offering to pay for you to complete your Executive MBA from OSU which will take $10,000 per year for 4 years starting immediately after your MS graduation in May 2020. Management will set aside a sum of money now in their Education Fund paying 7% interest that will be enough to provide the four payments of $10,000 each. While the education money has been deposited today by the management, you will need...
Erin is Yard and Shipping Supervisor for a Modular/Manufactured home company in Edmonton, Alberta. The company,...
Erin is Yard and Shipping Supervisor for a Modular/Manufactured home company in Edmonton, Alberta. The company, in business for over 25 years, has a good reputation but does not have a formal quality control/assurance program. Erin has been the yard supervisor for 4 years and prior to that she worked a variety of jobs in the assembly plant. In her position she is responsible for the supervision of the storage yard where finished homes are held prior to shipping. In...
Consumer finance: Four years ago you bought a home using a 15-year mortgage. The mortgage had...
Consumer finance: Four years ago you bought a home using a 15-year mortgage. The mortgage had an interest rate of 6% (or 0.50% per month) and the original loan amount was $230,000. Your monthly payments (ignoring escrow payments) are $1,940.87. Today you have 132 monthly payments remaining. You got a bonus at work (or a gift or something) so in addition to you next monthly payment you will send in $6,000 to reduce the principal on the loan. A. What...
Q1. An investment company offers you an annuity of $20,000 per year for the next 10...
Q1. An investment company offers you an annuity of $20,000 per year for the next 10 years. The interest rate is 10%. How much would you be willing to pay for the annuity? Q2. You have $100,000 to invest now and would also like to invest $6,000 for each of the next five years in an investment which returns 8% per year. With annual compounding, how much will your investment be worth in 5 years?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT