You have been offered a job with a new company, which will pay you $15,000 more per year. It will take you six years before you get to that level in your current company, but you believe you will get raises of $3,000 per year for the next five years beginning a year from now if you stay in your current job; raises are less certain with your new company, so we are not including them in the assumption for the new job offer

(Hint: when comparing jobs, the cash flow salary differential is $15,000 in year one, $12,000 in year two, $9,000 in year three, $6,000 in year four, $3,000 in year five, and $0-no need for an entry in year six). Problem is, you will have moving expenses, a real estate commission, and closing costs you need to pay on your current home and closing costs you will need to pay on your new home (you can fund your down payment with proceeds from the sale of your existing house), you estimate these total $40,000 (this is your initial investment or CFo).

You will need to withdraw money from a mutual fund currently earning a 12% return (this is your required rate of return/opportunity cost) to finance the move.

Based upon NPV (please compute), should you accept the offer?

Also calculate the IRR and Profitability Index.