You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two...

 

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You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $74,000 per year for the next two years, or you can have $63,000 per year for the next two years, along with a $19,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 8 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Option 1 Option 21 You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $74,000 per year for the next two years, or you can have $63,000 per year for the next two years, along with a $19,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 8 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Option 1 Option 21

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To determine the present value of each option we need to calculate the present value of the salary p... View the full answer