Company B is expecting a total sale to be 5 million in the first year and...
Company B is expecting a total sale to be 5 million in the first year and will increase by 10% each year for the next 5 years. The company will set aside 2% of its’ total sales for year-end employee bonuses. Interest rate is 8% per year.
What is the equivalent annual worth in year 1 through year 5 of the bonus package?
Please answer using excel and excel equations.
Homework Answers
| YEAR | SALES | EMPLOYEE BONUS | PVF@8% | EQUIVALENT ANNUAL WORTH |
| 1 | 50,00,000.00 | 1,00,000.00 | 0.92593 | 92,592.59 |
| 2 | 55,00,000.00 | 1,10,000.00 | 0.85734 | 94,307.27 |
| 3 | 60,50,000.00 | 1,21,000.00 | 0.79383 | 96,053.70 |
| 4 | 66,55,000.00 | 1,33,100.00 | 0.73503 | 97,832.47 |
| 5 | 73,20,500.00 | 1,46,410.00 | 0.68058 | 99,644.19 |
| 4,80,430.22 |
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