Terms of today purchasing power

Assignment Help Business Economics

Reference no: EM131810823

As a recent graduate, you are considering employment offers from three different companies. However, in an effort to confuse you and perhaps make their offers seem better, each company has used a different purchasing power base for expressing your annual salary over the next 5 years. If you expect inflation to be 6% for the next 5 years and your personal (real) MARR is 8%, which plan would you choose? Company

A: A constant $50,000 per year in terms of today's purchasing power. Company

B: $45,000 the first year, with increases of $2500 per year thereafter. Company

C: A constant $65,000 per year in terms of Year-5-based purchasing power.

Reference no: EM131810823

Questions Cloud

Calculate the present worth of the gifts : If general price inflation, as well as tuition price inflation, is expected to average 5% per year for those 8 years, calculate the present worth of the gifts.

Prepare the journal entry to record the redemption : On January 2, 2012, Novak Corporation issued $1,050,000 of 10% bonds at 97 due December 31, 2021. Prepare the journal entry to record the redemption

Typical of an industry with high investment intensity : Which of the following is typical of an industry with high investment intensity?

Calculate the number of equivalent units : a. Reconcile the number of physical units worked on during the period.b. Calculate the number of equivalent units.c. Calculate the cost per equivalent unit.

Terms of today purchasing power : A: A constant $50,000 per year in terms of today's purchasing power. Company B: $45,000 the first year, with increases of $2500 per year thereafter. Company

Explain which method is the most practical : How do we use computer-based budgeting in sensitivity analysis, Prepare a budgeted balance sheet as of June 30

Friction factor for elastomer inner tube of hydraulic hose : Derive the table values using the equations. You may use a friction factor given in Fig. for the elastomer inner tube of the hydraulic hose.

Calculate the pw of the revenue stream : The product will be discontinued at the end of Year 6. If the firm's interest rate is 10%, calculate the PW of the revenue stream.

What is the present worth of the machinery : What is the present worth of the machinery if the market rate of interest for Widget is 9%?

User Account

All Pages