Ted recently was offered a position with a major accounting firm. The firm offered Ted either a signing bonus of $25,000 payable on the first day of work or a signing bonus of $28,000 payable after one year of employment. Assuming that the relevant interest rate is 12%, which option should Ted choose?
The signing bonus of $25,000 payable on the first day of work.
The signing bonus of $28,000 payable after one year of employment.
The options are equivalent.
Insufficient information to determine.
Solution
c) The options are equivalent.
Because. Ted will receive the signing bonus of $25,000 payable on the first day of work
After one year with 12%=$28,000Â Â /Â Â 1.12(1+0.12)=$25,000
$25,000 joining =$25,000 one year are equal
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Ted recently was offered a position with a major accounting firm- The.docx
1. Ted recently was offered a position with a major accounting firm. The firm offered Ted either a
signing bonus of $25,000 payable on the first day of work or a signing bonus of $28,000 payable
after one year of employment. Assuming that the relevant interest rate is 12%, which option
should Ted choose?
The signing bonus of $25,000 payable on the first day of work.
The signing bonus of $28,000 payable after one year of employment.
The options are equivalent.
Insufficient information to determine.
The signing bonus of $25,000 payable on the first day of work.
The signing bonus of $28,000 payable after one year of employment.
The options are equivalent.
Insufficient information to determine.
Solution
c) The options are equivalent.
Because. Ted will receive the signing bonus of $25,000 payable on the first day of work
After one year with 12%=$28,000Â Â /Â Â 1.12(1+0.12)=$25,000
$25,000 joining =$25,000 one year are equal
______________________________________________________________________________
___________
