Signing bonus at the date of employment


Garland Inc. offers a new employee a lump sum signing bonus at the date of employment, June 1, 2011. Alternatively, the employee can take $39,000 at the date of employment plus $10,000 each June 1 for five years, beginning in 2015. Assuming the employee's time value of money is 9% annually, what lump sum at employment date would make him indifferent between the two options.

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Accounting Basics: Signing bonus at the date of employment
Reference No:- TGS071373

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