Question
Your required rate of return is 20% and your income tax is 0%. You have job offers from two different companies, say A and B.
Your required rate of return is 20% and your income tax is 0%. You have job offers from two different companies, say A and B. Company A offers a 5-year contract, with a signing bonus of $100 and an annual wage of $80 in the first year, which will grow 10% a year over the duration of the contract. Company B offers a 5-year contract, with a constant annual wage and a severance pay of $100 at the termination of the contract. Everything else equal (e.g., perks, location, co-workers), what is the minimum annual wage offered by Company B for which you should accept their offer over Company As offer?
Group of answer choices
$114.39
$120.03
$91.75
$136.89
$108.61
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