Job A offers you the following financial package: base salary of $35,000, 2 weeks paid vacation, full coverage health insurance
1 answer:
Answer:
The first one offers the best financial advantage
Explanation:
After reading carefully both offers, the first one does not imply any charges on the employee because both, health insurance and vacations, are full covered. On the other hand, when we analyze the second offer, despite the base salary is $5000 higher, the health insurance is deducted from the employee's pay check. Comparing both offers with numbers we have:
Finally, we can conclude that the first offer has a $720 advantage over the second one. Therefore, it is better to choose it.
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Answer: Make immediate payment of $2,458,000
Explanation:
The recommended payment option will be the one with a lower present value.
It can make a payment of $2,458,000 now which would be the PV of the first option.
Second option is a constant amount for 15 years to be paid on the first day of every year making it an annuity due.
Present Value of annuity due;
= Annuity * Present value factor of Annuity due, 15 periods, 11%
= 336,800 * 7.9819
= $2,688,303.92
<em>Lower and recommended option is to make immediate payment of $2,458,000. </em>
