Obviously, the package is not worth ($25) million because the payments are spread out over three years.

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Obviously, the package is not worth \($25\) million because the payments are spread out over three years. The bonus is paid today, so it’s worth \($2\) million. The present values for the three subsequent salary payments are:

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The package is worth a total of \($18.9721\) million.

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Fundamentals Of Corporate Finance

ISBN: 9780072313000

5th Edition

Authors: Stephen A Ross, Randolph W Westerfield

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