Indifferent between the two options


Davenport Inc. offers a new employee a lump-sum signing bonus at the date of employment. Alternatively, the employee can take $29,000 at the date of employment and another $52,000 five years later. Assuming the employee's time value of money is 10% annually, what lump-sum at employment date would make her indifferent between the two options?

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Accounting Basics: Indifferent between the two options
Reference No:- TGS0521420

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