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Under the terms of his salary agreement, president Adams Walters has an option of receiving either an immediate bonus of $66,000, or a deferred bonus of $84,000 payable in 10 years. Ignoring tax considerations and assuming a relevant interest rate of

Sale price $15.00 Regular price $30.00

Under the terms of his salary agreement, president Adams Walters has
an option of receiving either an immediate bonus of $66,000, or a deferred bonus of $84,000 payable in 10 years.

Ignoring tax considerations and assuming a relevant interest rate of 4%, which form of settlement should Walters accept?

Present value of deferred bonus$

Accept Deffered Bonus in 10 years
Accept Bonus Now

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