Question
David Alonso has received a job offer from a large investment bank as a local Manager. His base salary will be 255,000. He will receive
David Alonso has received a job offer from a large investment bank as a local Manager. His base salary will be 255,000. He will receive his first annual salary payment one year from the day he begins to work. In addition, he will get an immediate 25,500 bonus for joining the company. His salary will grow at 4% percent each year. David believes he will achieve a yearly bonus of 25% of his annual salary every year.
David is today 40 years old, and he expects to work in the company for ten years, how much is the present value of this job offering if the applicable discount rate is 11%?
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