You receive two job offers in the same big city The first jo

You receive two job offers in the same big city. The first job is close to your parents\' house, and they have offered to let you live at home for a year so you will not have to incur expenses for housing, food, or internet service. This job pays S46,000 per year. The second job is far enough from your parents\' house that you will have to rent an apartment with parking (56,000 per year), buy your own food (53,800 per year), and pay for your own internet ($570 per year). This job pays S52,000 per year. You still plan to do laundry at your parents\' house once a week f you live in the city, and plan to go into the city once a week to visit with friends if you live at home. Thus, the cost of operating your car will be about the same either way. In addition, your parents refuse to pay for your cell phone service ($780 per year), and you cannot function without it. Reguirements Requirement a. Based on this information alone, what is the net difference between the two alternatives (salary, net of relevant costs)? Begin by computing the net salary for each alternative. Job # 1 Job # 2 Salary Less: Relevant expenses Salary, net The net difference between the two jobs is $ I would save this much money if I chose Requirement b. What information is irrelevant? Why? The Requirement c. What qualitative information is relevant to your decision? I might consider whether Requirement d. Assume you really want o take Job 2, but you also want 0 live at home to cut costs. What new quantitative and qualitative information will you need to incorporate n your decision? If I want Job #2 and I want to live at home, I will benefit by the will want to consider whether the | irrelevant because they . I would benefit if I . However, I will need to factor in , Qualitatively, I

Solution

The net difference between the two jobs is $4,370

I would save this much money if I chose Job 1

Requirement b.

The cost of operating the car and the phone expenses are irrelevant becuase they would be incurred in both the cases.

Requirement c

The drop downs are required for this answer as the asnwer cannot be given from the information provided.

Requirement d

If I want job 2 and I want to live at home, I will benefit by the rent, food and internet charges. However,I will need to factor in the travelling costs from home to office and vice versa.

	Job#1	Job#2
Salary	$46,000	$52,000
Less: relevent expenses	$0
Rent		$6,000
Food		$3,800
Internet		$570
Total relevent expenses		$10,370
Salary, net	$46,000	$41,630