You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two
Question # 00112628
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Updated on: 10/05/2015 08:25 AM Due on: 10/08/2015
You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $85,000 per year for the next two years, or you can have $74,000 per year for the next two years, along with a $30,000 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 9 percent compounded monthly, what is the PV for both the options? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
Present Value of Option 1:
Present Value of Option 2:
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Rating:
/5
Solution: You’ve just joined the investment banking firm of Dewey, Cheatum