Garland Inc. offers a new employee a single-sum signing bonus at the date of employment, June 1, 2021. Alternatively, the employee can receive $50,000 at the date of employment plus $21,000 each June 1 for four years, beginning in 2024. Assuming the employee's time value of money is 9% annually, what single amount at the employment date would make the options equally desirable?

Garland Inc. offers a new employee a single-sum signing bonus at the date of employment, June 1, 2021. Alternatively, the employee can receive $50,000 at the date of employment plus $21,000 each June 1 for four years, beginning in 2024. Assuming the employee's time value of money is 9% annually, what single amount at the employment date would make the options equally desirable?

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 27P

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