1. Comparing Jobs

Mr. A, an Indian national has got two job offers after completing his MBA degree. One offer is from an Indian

company and pays him 10,000,000 INR (Indian Rupees) annually.The other offer is from a company in Singapore and pays him 80,000 SGD (Singapore Dollars) per year. Due to family committments,

MR A. can not stay away from India for more than 3 years. The exchange rate between INR and Singapore

Dollars is expected to be 50 INR/SGD after one year, 55 INR/SGD after two years and 45 INR/SGD after two years and 45 INR/SGD55 INR/SGD after two years and 45 INR/SGD after three years. MR A. needs to support his family

to the extent of 4,00,000 INR per year. His personal consumption needs equal 10 consumption baskets

irrespective of where he stays. If Mr.A takes up the job in Singapore, then after 3 years he would like to convert

all his savings in SGD to INR. The price level in India and Singapore will be constant over next 3 years and

it will be 20,000 INR per basket in India and 5000 SGD in Singapore.

a) Compute the total savings Mr A can accumulate over the span of 3 years if he decides to work in Singapore.

b) Compute total savings MR A can accumulate over the span of 3 years if he decides to work in India.

c) Which job offer should he accept from a financial perspective? (Hint: try to see in which job he saves more)

Please Explain/show all steps to solving the questions. Thanks!