You have just been offered a job. Your base salary will be $90,000 per year and...

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Finance

You have just been offered a job. Your base salary will be$90,000 per year and the first year’s annual salary will bereceived one year from the day you start working. You receive abonus immediately of $12,500. Your salary will grow 4 percent peryear and you will receive a bonus of 10 percent of your salary. Youexpect to work 30 for years. Your discount rate is 11 percent. Whatis the present value of your offer?
-$1,428,726.78
-$1,427,488.04
-$1,433,232.96

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3.9 Ratings (744 Votes)

It is given that Bonus of 12500 is received immediatelytherefore present value of this bonus will be equal to the See Answer

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You have just been offered a job. Your base salary will be$90,000 per year and the first year’s annual salary will bereceived one year from the day you start working. You receive abonus immediately of $12,500. Your salary will grow 4 percent peryear and you will receive a bonus of 10 percent of your salary. Youexpect to work 30 for years. Your discount rate is 11 percent. Whatis the present value of your offer?-$1,428,726.78-$1,427,488.04-$1,433,232.96