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You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $124,000 per
You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $124,000 per year for the next two years, or you can have $50,000 per year for the next two years, along with a $20,000 signing bonus today. The bonus is paid immediately, and the salary is paid at the end of each year. Required: (a) If the interest rate is 8 percent compounded monthly, what is the present value of the first arrangement? (Click to select) (b) If the interest rate is 8 percent compounded monthly, what is the present value of the second arrangement? (Click to select)
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