Calculating Sales Amount:
1st Year Sales = $5,000,000
Every the sales were increased by 20%
2nd Year Sales = $5,000,000 + ($5,000,000*20%)
= $6,000,000
3rd Year Sales = $6,000,000 + ($6,000,000 * 20%)
= $7,200,000
4th Year Sales = $7,200,000 + ($7,200,000 *20%)
= $8,640,000
5th Year Sales = $8,640,000 + ($8,640,000 *20%)
= $10,368,000
Calculating Bonus Amount:
1st Year Bonus Amount = $5,000,000 * 1%
= $50,000
2nd Year Bonus Amount = $6,000,000 * 1%
= $60,000
3rd Year Bonus Amount = $7,200,000 * 1%
= $72,000
4th Year Bonus Amount = $8,640,000 * 1%
= $86,400
5th Year Bonus Amount = $10,368,000 * 1%
= $103,680
Year Bonus Amount Present Value Factor 10% Present Values
1 $50,000 0.909 $45,450
2 $60,000 0.826 $49,560
3 $72,000 0.751 $54,072
4 $86,400 0.683 $59,011.20
5 $103,680 0.621 $64,385.28
PresentValue $272,478.48
