Company B is expecting a total sale to be 5 million in the first year and will increase by 10% each year for the next 5 years. The company will set aside 2% of its’ total sales for year-end employee bonuses. Interest rate is 8% per year. What is the equivalent annual worth in year 1 through year 5 of the bonus package?

Company B is expecting a total sale to be 5 million in the first year and will increase by 10% each year for the next 5 years. The company will set aside 2% of its’ total sales for year-end employee bonuses. Interest rate is 8% per year. What is the equivalent annual worth in year 1 through year 5 of the bonus package?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter13: Other Financing Alternatives

Section: Chapter Questions

Problem 1bM

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