2. You have two job offers with the following 6-year compensation terms: the first one offers...
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2. You have two job offers with the following 6-year compensation terms: the first one offers you $80,000 a year for the next 6 years; the other one offers you a signing bonus of $15,000 plus $50,000 a year for the first 4 years and then 60,000 a year for the last two years. Assume that the appropriate discount rate is 12% and there are no taxes. a. How much would you lose in present value if you accepted the second offer? b. Propose a change to the second offer that would make you indifferent between the two offers. 2. You have two job offers with the following 6-year compensation terms: the first one offers you $80,000 a year for the next 6 years; the other one offers you a signing bonus of $15,000 plus $50,000 a year for the first 4 years and then 60,000 a year for the last two years. Assume that the appropriate discount rate is 12% and there are no taxes. a. How much would you lose in present value if you accepted the second offer? b. Propose a change to the second offer that would make you indifferent between the two offers.
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To compare the two job offers we need to calculate the present value of each offer and then compare them a Present Value Calculation For the first off... View the full answer
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