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Answer is A, how do you solve it? 31. On January 1 , Boston Company agreed to pay a severance package to a discharged employee.

Answer is A, how do you solve it?image text in transcribed

31. On January 1 , Boston Company agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112,500 at the end of the second year, and $150,000 at the end of the third year. What is the present value of this obligation if a 7% annual interest rate is applied? A) $290,801 B) $275,093 C) $348,000 D) $196,824

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