What is the present value of the offer

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Problem 1: Mary Adams has received a job offer from Bank of America as an assistant to the vice president. Her basic salary will be $35,000. She will receive her first annual salary payment one year from the day of joining. In addition, she will get an immediate $100,000 bonus for joining the company. Her salary is expected to grow at 4 percent each year. Each year she will receive a bonus equal to 10 percent of her salary. Ms. Adams is expected to work for 25 years. What is the present value of the offer if the discount rate is 12 percent?

Reference no: EM132835784

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