Overland Corporation, having recently issued a $30 million, 10-year bond issue, is committed to make annual sinking fund deposits of $2,000,000. The deposits are made on the last day of each year and yield a return of 6%. Will the fund at the end of 10 years be sufficient to retire the bonds? If not, what will the deficiency be?

Under the terms of his salary agreement, president Jose Rodriguez has an option of receiving either an immediate bonus of $50,000, or a deferred bonus of $80,000 payable in 10 years. Ignoring tax considerations, and assuming a relevant interest rate of 6%, which form of settlement should Rodriquez accept?