Bull Built, a design/build engineering company that has always given year-end bonuses in the amount of $4,000 to each of its engineers, is having cash flow problems. The president said that although Bull Built couldn’t give bonuses this year, next year’s bonus would be large enough to make up for this year’s omission. If the interest rate is 10% per year, what is the equivalent bonus that engineers should receive next year?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Bull Built, a design/build engineering company
that has always given year-end bonuses in the
amount of $4,000 to each of its engineers, is having
cash flow problems. The president said that
although Bull Built couldn’t give bonuses this
year, next year’s bonus would be large enough to
make up for this year’s omission. If the interest rate
is 10% per year, what is the equivalent bonus that
engineers should receive next year?

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