Inside vs Outside Recruiter
Outsource recruitment of programmers costs $250,000 annually.
Hiring an internal recruiter costs you $175,000 annually.
Tax rate is 40%.
You have to buy out his business for $150,000.
What is the NPV and IRR over a 5 year period?
WACC is 11%.
If you can not meet his asking price, how much would you be willing to pay him in order
to meet your cost of capital?