Suzanne is a recent chemical engineering graduate, who has been offered a five- year contract at a remote location. She has been offered two choices. The first salary choice is a fixed salary of $75,000 per year. The second one has a starting salary of $65,000 with annual increases of 2% starting at the beginning of year 2. For calculation purposes, assume that her salary is paid at the end of the year. The annual interest rate is 9%. If the difference between these two options is more than 1%, Suzanne will choose the higher one. Select the best answer: Select one: a. Option 1 is better than option 2. b. Option 2 is better than option 1. c. Both are approximately the same since the difference is less than 1%. d. The provided information is not sufficient for comparison.

Suzanne is a recent chemical engineering graduate, who has been offered a five- year contract at a remote location. She has been offered two choices. The first salary choice is a fixed salary of $75,000 per year. The second one has a starting salary of $65,000 with annual increases of 2% starting at the beginning of year 2. For calculation purposes, assume that her salary is paid at the end of the year. The annual interest rate is 9%. If the difference between these two options is more than 1%, Suzanne will choose the higher one. Select the best answer: Select one: a. Option 1 is better than option 2. b. Option 2 is better than option 1. c. Both are approximately the same since the difference is less than 1%. d. The provided information is not sufficient for comparison.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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