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After finishing college, you are torn between two career paths: banking or becoming a Finance Professor. If you choose to become a banker, you can
After finishing college, you are torn between two career paths: banking or becoming a Finance Professor. If you choose to become a banker, you can start your job right away with a yearly salary of $ for the first two years. In year your salary will increase to $ and will continue to grow by every year after that. However, there is uncertainty in the banking profession, and you expect to work for years before retiring. To evaluate the cash flows, you have decided to use a discount rate. On the other hand, if you choose to become a Finance Professor, you will need to pursue graduate studies for six more years with an annual expense of $ You will make six total payments, with the first payment due today. After completing your studies, it will take you two more years to find a job as a Professor, starting with a yearly salary of $ which will grow by each year. However, academia is less uncertain, and you expect to work for years as a Professor. To evaluate the cash flows, you have decided to use a discount rate.
After finishing college, you are torn between two career paths: banking or becoming
a Finance Professor. If you choose to become a banker, you can start your job right
away with a yearly salary of $ for the first two years. In year your salary will
increase to $ and will continue to grow by every year after that. However,
there is uncertainty in the banking profession, and you expect to work for years
before retiring. To evaluate the cash flows, you have decided to use a discount
rate.
On the other hand, if you choose to become a Finance Professor, you will need to
pursue graduate studies for six more years with an annual expense of $ You
will make six total payments, with the first payment due today. After completing your
studies, it will take you two more years to find a job as a Professor, starting with a
yearly salary of $ which will grow by each year. However, academia is less
uncertain, and you expect to work for years as a Professor. To evaluate the cash
flows, you have decided to use a discount rate.
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