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QUESTION

Marsha Bittner expects to receive a $600,000 cash benefit when she retires in five years from today.

Marsha Bittner expects to receive a $600,000 cash benefit when she retires in five years from today. Ms. Bittner’s employer has offered an early retirement incentive by agreeing to pay her $360,000 today if she agrees to retire immediately. Ms. Bittner desires to earn a rate of return of 12 percent.a. Assuming that the retirement benefit is the only consideration in making the retirement decision, should Ms. Bittner accept her employer’s offer?

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