Question

Jerry recently was offered a position with a major accounting firm. The firm offered Jerry either a signing bonus of $23,000 payable on the first day of work or a signing bonus of $26,000 payable after one year of employment. Assuming that the relevant interest rate is 10%, which option should Jerry choose?A) The options arc equivalent. B) Insufficient information to determine. C) The signing bonus of $23,000 payable on the first day of work. D) The signing bonus of $26,000 payable after one year of employment.

Answer 1

Answer. D) The signing bonus of $26,000 payable after one year of employment.

Explanation: Because it is more advantageous on him and also he has the time to payback within a year. He will be at rest to use fund for something that can fetch more money even within the 12 months period.