What is the present value of the offer if the discount rate

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Reference no: EM132031545

Tom Adams has received a job offer from a large investment bank as a clerk to an associate banker. His base salary will be $49,000. He will receive his first annual salary payment one year from the day he begins to work.

In addition, he will get an immediate $20,000 bonus for joining the company. His salary will grow at 4.3 percent each year.

Each year he will receive a bonus equal to 10 percent of his salary. Mr. Adams is expected to work for 30 years. What is the present value of the offer if the discount rate is 8 percent?

(Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) Please show how you arrived at your answer.

Reference no: EM132031545

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