Options for 6d are A or B Options for 6e are Higher or Lower...
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Finance
Options for 6d are A or B
Options for 6e are Higher or Lower
6 5 You have received two job offers. Firm A offers to pay you $88,000 per year for two years. Firm B offers to pay you $90,000 for two years. Two jobs are identical except that firm B has a 50% chance of going bankrupt at the end of the first year. If frim B goes bankrupt at the end of the first year, you expect you could find a new job paying $85,000 per year, but you would be unemployed for 3 months while you search for it. (Please provide your answers as integers, or, in the format of 123456). a. If firm B goes bankrupt at the end of the first year, your expected income in the second year is $ b. Given your answer to part (a), and assuming your cost of capital is 5%, the present value of offer B is $ C. The present value of offer A is $ 6 (continued from the previous question) d. The expected wage of offer Select alternative has a higher present value. e. Firms with a higher risk of bankruptcy may need to offer Select alternative wage to attract employees
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