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Problem 1 ( 30 points) John receives a job offer for a faculty position. A...

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Accounting

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Problem 1 ( 30 points) John receives a job offer for a faculty position. A faculty position is a nine-month position where the faculty will work only nine months per calendar year. The university gives him two options for the salary: Option A: John will receive a monthly salary at the end of each calendar month except for May, June, and July. For each working calendar month, the university will give him a fixed amount of $8,000.00 as a salary. Option B: John will receive an annual salary at the end of each calendar year for a fixed amount of $75,000.00. The interest rate is 9.6%, compounded weekly. Ignore income taxes. (A) What is the effective interest rate per week (iw) ? Assume one year has 52 weeks. (B) What is the effective annual interest rate (ia) ? (C) What is the effective interest rate per month (im) ? Assume one month has four weeks. (D) Which option should John choose on the basis of present worth analysis

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