Answer:
From the options provided, the amount of money HT must set aside each year for this purpose is B. $3,277,973
Step-by-step explanation:
We are provided with the following data from the question;
Amount to be paid to the CEO upon successful completion of first three years of service = $10.4 million
Amount to be earned on the anticipated cash outflow = 5.65 percent on the funds.
number of years = 3 years
solve
$10,400,000 = C × (1 + 0.0565)³ - 1 / 0.0565
$10,400,000 = C × 0.17925/0.0565
$10,400,000 = C × 3.1726
C = $10,400,000 ÷ 3.1726
C = $3,277,973
The amount Holiday Tours (HT) must set aside each year for this purpose is $3,277,973