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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Analysis Case 6–2
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Bonus alternatives; present value analysis
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Sally Hamilton has performed well as the chief financial officer of the Maxtech Computer Company and has earned a bonus. She has a choice among the following three bonus plans:
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1. A $50,000 cash bonus paid now.
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2. A $10,000 annual cash bonus to be paid each year over the next six years, with the first $10,000 paid now.
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3. A three-year $22,000 annual cash bonus with the first payment due three years from now.
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Required:
Evaluate the three alternative bonus plans. Sally can earn a 6% annual return on her investments
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