Question
Quaker State Incorporated offers a new employee a single-sum signing bonus at the date of employment. Alternatively, the employee can receive $8,300 at the date
Quaker State Incorporated offers a new employee a single-sum signing bonus at the date of employment. Alternatively, the employee can receive $8,300 at the date of employment plus $23,000 at the end of each of his first four years of service. Assuming the employee's time value of money is 10% annually, what lump sum at employment date would make him indifferent between the two options?
Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1,PVA of $1, FVAD of $1 and PVAD of $1)
Multiple Choice
$24,514
$81,207
$88,498
None of the other answer choices are correct.
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