The Great Giant Corp

question 84

Multiple Choice

The Great Giant Corp. has a management contract with its newly hired president. The contract requires a lump sum payment of $25 million be paid to the president upon the completion of her first ten years of service. The company wants to set aside an equal amount of funds each year to cover this anticipated cash outflow. The company can earn 6.5% on these funds. How much must the company set aside each year for this purpose?

• A) $1,775,042.93
• B) $1,798,346.17
• C) $1,801,033.67
• D) $1,852,617.25
• E) $1,938,018.22

---

Definitions:

Binding Labor Agreement

A legally enforceable contract between a labor union and an employer that specifies the terms of employment and worker rights.

Formal Grievance Systems

Institutionalized processes allowing employees to file complaints or disputes for formal review and resolution.

National Labor Relations Board

An independent U.S. federal agency that enforces labor law in relation to collective bargaining and unfair labor practices.

American Federation of Labor

A national federation of labor unions in the United States, founded in 1886, representing workers' interests in various industries.