1. Your potential employer would like to know the present value of the cost to employ you. Your initial salary is $71,000 and you will receive raises of 3.5% each year. The cost of your benefits is $22,000 in the first year, and are expected to increase at a rate of 5.5% per year.

a. Draw the cash flow diagram. (expample cash flow diagram)

b. Assuming an interest rate of 4%, what is the PV of the cost to employ you over an eight- year period?