1. An engineering firm is considering hiring an engineer to handle an increase in work. What is the minimum annual starting salary the firm can offer the engineer to ensure the new firm will realize an Annual Net Benefit of $35,000? Use an Annual Worth analysis Assumptions o The decision analysis period is 10 years o The employee will receive an acceptance bonus of $5,000 at the beginning of year one o The engineer will receive annual raises of 3% per yr The engineer will receive a $20,000 raise at the end of year 5 (new PE) The benefit/leave cost is 35% of salary, increasing by 0.5% per yr o The initial utilization rate for the engineer is 65%, increasing by 2% per yr o (ie.. 65% first year, 65% x 1.02 in year 2, 65% x 1.022 in year 3, etc.) o The work week is 40 hours (assume 52 weeks per year, no partial weeks) o The billing rate is the annual salary/52140 x a 2.6 multiplier o The MARR is 4% o Inflation is estimated at 2% per yr 1. An engineering firm is considering hiring an engineer to handle an increase in work. What is the minimum annual starting salary the firm can offer the engineer to ensure the new firm will realize an Annual Net Benefit of $35,000? Use an Annual Worth analysis Assumptions o The decision analysis period is 10 years o The employee will receive an acceptance bonus of $5,000 at the beginning of year one o The engineer will receive annual raises of 3% per yr The engineer will receive a $20,000 raise at the end of year 5 (new PE) The benefit/leave cost is 35% of salary, increasing by 0.5% per yr o The initial utilization rate for the engineer is 65%, increasing by 2% per yr o (ie.. 65% first year, 65% x 1.02 in year 2, 65% x 1.022 in year 3, etc.) o The work week is 40 hours (assume 52 weeks per year, no partial weeks) o The billing rate is the annual salary/52140 x a 2.6 multiplier o The MARR is 4% o Inflation is estimated at 2% per yr