Davenport Inc

question 103

Multiple Choice

Davenport Inc.offers a new employee a lump-sum signing bonus at the date of employment.Alternatively,the employee can take $30,000 at the date of employment and another $50,000 two years later.Assuming the employee's time value of money is 8% annually,what lump sum at employment date would make her indifferent between the two options?

• A)$60,000.
• B)$62,867.
• C)$72,867.
• D)$80,000.

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