Annual returns on investments

Sally hamiliton has performed as the chief financial officer of the maxtech computer company and has
earned a bonus , she has a choice among the following three plans -

1. 450,000 cash bonus paid now
2. A 10,000 annual cash bonus to be paid each year over the next six year , with the first 10,000 paid now .
3. A three year $22,00 annual cash bonus with the first payment due three years from now .

Evaluate three alternative bonus plans. Sally can earn a 6% annual return on her investments.
http:/Awww.maxtechcomputers.com/

Sample Solution