Tom Adams has received a job offer from a large investment bank as a clerk to an associate banker. His base salary will be $ 55,000. He will receive his first annual salary payment one year from the day he begins to work. In addition, he will get an immediate $ 10,000 bonus for joining the company. His salary will grow at 3.5 percent each year. Each year he will receive a bonus equal to 10 percent of his salary. Mr. Adams is expected to work for 25 years. What is the present value of the offer if the discount rate is 9 percent?
Answer to relevant QuestionsYou have recently won the super jackpot in the Washington State Lottery. On reading the fine print, you discover that you have the following two options: a. You will receive 31 annual payments of $ 250,000, with the first ...An insurance company is offering a new policy to its customers. Typically the policy is bought by a parent or grandparent for a child at the child’s birth. The details of the policy are as follows: The purchaser (say, the ...Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to ...An investment project has annual cash inflows of $ 5,000, $ 5,500, $ 6,000, and $ 7,000, and a discount rate of 14 percent. What is the discounted payback period for these cash flows if the initial cost is $ 8,000? What if ...Cutler Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow0 ......... -$ 85,000,0001 ......... 125,000,0002 ......... - 15,000,000a. If the company ...
Post your question