The great giant corp has a management contract with its


The Great Giant Corp. has a management contract with its newly hired president. The contract requires a lump sum payment of $25,100,000 be paid to the president upon the completion of her first 7 years of service. The company wants to set aside an equal amount of funds each year to cover this anticipated cash outflow. The company can earn 6 percent on these funds. How much must the company set aside each year for this purpose?

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Financial Management: The great giant corp has a management contract with its
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