Assume that you are unemployed, 25 years old, and searching for a job. Until you accept a job offer, the following situation occurs. At the beginning of each year, you receive a job offer. The annual salary associated with the job offer is equally likely to be any number between $40,000 and $120,000. You must immediately choose whether to accept the job offer. If you accept an offer with salary $x, you receive $x per year while you work (assume you retire at age 70), including the

current year. Assume that cash flows are discounted so that a cash flow received one year from now has a present value of 0.9. You decide to accept the first job offer that exceeds w dollars.

Use simulation to determine the value of w (within $10,000) that maximizes the expected NPV of

earnings you will receive the rest of your working life.