Global Stores is downsizing and must let some employees go. Employees volunteering to leave are being offered

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Global Stores is downsizing and must let some employees go. Employees volunteering to leave are being offered a severance package of $118,000 cash, another $129,000 to be paid in one year, and an annuity of $27,500 to be paid each year for six years with the first payment coming at the end of this year. What is the present value of the total severance package, assuming an annual interest rate of 5%?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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Financial Accounting

ISBN: 978-1259222139

9th edition

Authors: Robert Libby, Patricia Libby, Frank Hodge

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