Question

Jerry was recently 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 he will remain at the firm for a least one year and given a relevant interest rate of 15%, which option should Jerry choose?
a. The options are 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:

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

Explanation:

Signing bonus can be said to be am amount of money or cash which is been paid to a new employee which an organisation or company newly employed in which such money paid to the new employee is an incentive for joining that company reason been that the incentive are often given as a way of making a compensation package more attractive to the employee especially in a situation where the annual salary is lesser than they desire.

Therefore assuming that he will remain at the firm for a least one year and given a relevant interest rate of 15%, Jerry should choose The signing bonus of $26,000 payable after one year of employment.