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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 $79,000 per year for the next two years, or you can have $68,000 per year for the next two years, along with a $24,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. |
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If the interest rate is 9 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
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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 $66,000 per year for the next two years, or you can have $55,000 per year for the next two years, along with a $11,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 9 percent compounded monthly, what is the PV for both the options? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) PV Option 1 $______ Option 2 $_______You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $77,000 per year for the next two years, or you can have $66,000 per year for the next two years, along with a $22,000 signing bonus today. The bonus is paid immediately and the salary is paid in equal amounts at the end of each month. If the interest rate is 8 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Option 1 Option 2You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $80,000 per year for the next two years, or you can have $69,000 per year for the next two years, along with a $25,000 signing bonus today. The bonus is paid immediately and the salary is paid in equal amounts at the end of each month. If the interest rate is 8 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
- You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $70,000 per year for the next two years, or you can have $59,000 per year for the next two years, along with a $15,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 10 percent compounded monthly, what is the PV for both the options? PV Option 1$ Option 2$You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $8,400 per month for the next two years, or you can have $7,100 per month for the next two years, along with a $38,000 signing bonus today. Assume the interest rate is 7 percent compounded monthly. a. If you take the first option, $8,400 per month for two years, what is the present value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value of the second option? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)You just joined the investment banking firm of Dewey Cheatham and Howe. They’ve offered you two different salary arrangements. You can have$6100 per month for the next two years or you can have $5100 per month for the next two years along with the $25,000 signing bonus today. If the interest rate is 7% compounded monthly. Which do you prefer?
- You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $8,500 per month for the next three years, or you can have $7,200 per month for the next three years, along with a $38,500 signing bonus today. Assume the interest rate is 8 percent compounded monthly. a. If you take the first option, $8,500 per month for three years, what is the present value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value of the second option? (You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $7,900 per month for the next three years, or you can have $6,600 per month for the next three years, along with a $35,500 signing bonus today. Assume the interest rate is 5 percent compounded monthly. a. If you take the first option, $7,900 per month for three years, what is the present value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value of the second option? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) A value of first option B Value of Second OptionAssume that you will have a 10-year, $20,000 loan to repay when you graduate from college next month. The loan, plus 10 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $3,255 each, beginning one year after you graduate. You have accepted a well-paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $3,255). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.) Interest Period Date of Graduation Year 1 Year 2 Year 3 Annual Payment Annual Interest Expense @10% a. Actual net-of-tax interest cost b. Effective interest rate Reduction in Unpaid Balance Unpaid Balance One of the advantages of borrowing is that interest is deductible for income tax purposes. a.…
- Q4. You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $95,000 per year for the next two years, or you can have $70,000 per year for the next two years, along with a $45,000 signing bonus today. The bonus is paid immediately, and the salary is paid at the end of each year. If the interest rate is 10 percent compounded monthly, which do you prefer?You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They'veoffered you two different salary arrangements. You can have $7,000 per month for thenext two years, or you can have $5,700 per month for the next two years, along with a$31,000 signing bonus today. Assume the interest rate is 6 percent compoundedmonthly.a. If you take the first option, $7,000 per month for two years, what is the present value?(Do not round intermediate calculations and round your answer to 2 decimalplaces, e.g., 32.16.)b. What is the present value of the second option? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)You have just entered a two-year part-time Executive MBA. The tuition fee is $15,000 per year payable at the beginning of each year. Before the program you eamed $40, 000 per year. Your expected salary after graduation. is $55, 000 per year. You can invest your money at 8%. Assume that you will work for 30 years after graduation. The salary differential of $15,000 will continue through this period. How much is your EMBA worth?