Question
3. Suppose you have just graduated Wesleyan and are made the following job offer: BigBank Enterprises offers you a $30,000 signing bonus (to be paid
3. Suppose you have just graduated Wesleyan and are made the following job offer: BigBank Enterprises offers you a $30,000 signing bonus (to be paid immediately), a first year salary of $60,000 (to be paid one year from now), a second year salary of $70,000 (to be paid two years from now), and a third year salary of $80,000 (to be paid three years from now). You also have an offer from MegaTek, Inc., which offers you a signing bonus of $65,000, a first year salary of $55,000, and second and third year salaries of $60,000. a. If you add up the amounts offered by both firms without discounting, which offer appears to be the better deal? b. Assume an interest rate of ten percent. If all other things are equal, which offer should you accept? c. Would your answer change with an interest rate of five percent? Show your calculations/spreadsheet.
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