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6. You just graduated from LSUS. Recruiters are eager to hire you. You have two competing job offers. Job #1 offers $50,000 a year with
6. You just graduated from LSUS. Recruiters are eager to hire you. You have two competing job offers. Job #1 offers $50,000 a year with a guarantee raise of 2% a year. Job #2 offers $48,000 with a guarantee of 6% raise every year. You know that you will stay at this job for 5 years minimum. You expect inflation (discount rate) to be around 3%. What job do you take? Answer: Job #1 The NPV is $250,450 Answer: Job #1 The NPV is $238,051 Answer: Job #2 The NPV is $246,984 Answer: Job #2 The NPV is $415,002
6. You just graduated from LSUS. Recruiters are eager to hire you. You have two competing job offers. Job #1 offers $50,000 a year with a guarantee raise of 2% a year. Job #2 offers $48,000 with a guarantee of 6% raise every year. You know that you will stay at this job for 5 years minimum. You expect inflation (discount rate) to be around 3%. What job do you take? Answer: Job #1 The NPV is $250,450 Answer: Job #1 The NPV is $238,051 Answer: Job #2 The NPV is $246,984 Answer: Job #2 The NPV is $415,002
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