Alternative compensation packages to induce to retire

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Reference no: EM131247496

Amy Applegate is 60 years old and has been asked to accept early retirement from her company. The company has offered three alternative compensation packages to induce Amy to retire: (1) $400,000 cash payment to be paid immediately (2) A 15-year annuity of $40,000 beginning immediately (3) A 15-year annuity of $45,000 beginning at age 65. Which alternative should Amy choose assuming that she is able to invest the funds at a 6% rate?

Reference no: EM131247496

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