Please download the Excel "Playground for Hiring" from Canvas. What is the Expected Present Value (EPV) of the risky worker if probability of good is 0.5. All other parameters are same as the base case.

Please download the Excel "Playground for Hiring" from Canvas. What is the Expected Present Value (EPV) of the risky worker if discount rate is 0.1. All other parameters are same as the base case.

Download Risky Workers.XIsX (17.6 KB) Hiring Risky Workers-- Spreadsheet Example In this example, "bad" workers are detected after ONE period Base Discount Rate (r) = Quit Rate (0) = Oo Firing Cost = "Safe" Worker Characteristics: Risky" Worker Characteristics: actual base case actual base case Sales: 200 200 Sales if Bad: Sales if Good: 1000 1000 Probability (Good) 0.2 0.2 Salary: 100 100 Salary: 100 100 Expected Sales: 200 200 Safe Worker Risky Worker (1) (2) (3) (4) (5) (6 (7) (1) (2) (3) (4) (5 6) (7 ) Share of Sales- EPV(Sales- E(Sales - Sales- EPV(Sales- workers Salary Salary) Salary - Salary-FC Salary-FC) Sales- who haven't after after Sales Salary Sales Salary Firing after after Year Sales Salary Salary quit (R) quits quits If Bad if Bad If Good if Good Costs) quits quits 200 100 100 1.000 100.0 100.0 100 100 100 100 100.0 100.0 200 100 100 1.000 100.0 100.0 0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 100 100 180 180.0 180.0 SO NO CI A W N- 200 100 100 1.000 100.0 100.0 0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 200 100 100 1.000 100.0 100.0 1000 100 180 180.0 180.0 SUM 2000 1000 1000 1000 1000 0 100 10000 1000 1720 1720 1720 Note: All magnitudes are in thousands of dollars. "base case" parameter values are in bold