Setrakian Industries needs to raise $83.3 million to fund a new project. The company will sell bonds that have a coupon rate of
1 answer:
You might be interested in
Answer: Josh's bonus is $35,289.53.
In the question above, we need to look at the net savings that will occur from selling drinks instead of giving them as complimentary drinks. So we have,
Net Savings per year = $11.04 million
The company's MARR = 15%
Josh's bonus is 0.14% of the present value of three years' net savings.
Since the quantum of savings is constant each year, we can calculate the present value of these savings by using the Present Value of annuity formula.
PVA = Present value of three years' net savings = 25.20680529 million
Josh's bonus : 0.14% of present value of three years' net savings.
Josh's Bonus = $0.035289527 million or $35,289.53.