Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offered an early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1& and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer's offer? Note: Round your final answer to the nearest whole dollar value. Present value Should Ms. Trevino accept the offer?
Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offered an early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a rate of return of 10 percent. (PV of $1& and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Trevino accept her employer's offer? Note: Round your final answer to the nearest whole dollar value. Present value Should Ms. Trevino accept the offer?
Chapter12: Tax Credits And Payments
Section: Chapter Questions
Problem 35P
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Gail Trevino expects to receive a $580,000 cash benefit when she retires seven years from today. Ms. Trevino's employer has offered
an early retirement incentive by agreeing to pay her $310,000 today if she agrees to retire immediately. Ms. Trevino desires to earn a
rate of return of 10 percent. (PV of $1& and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
raw
Required
a. Calculate the present value of the $580,000 future cash benefit. Assuming that the retirement benefit is the only consideration in
making the retirement decision, should Ms. Trevino accept her employer's offer?
Note: Round your final answer to the nearest whole dollar value.
Present value
Should Ms. Trevino accept the offer?
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