Jerry Recently Was Offered a Position with a Major Accounting

Multiple Choice

Jerry recently was offered a position with a major accounting firm. The firm offered Jerry either a signing bonus of £23,000 payable on the first day of work or a signing bonus of £26,000 payable after one year of employment. Assuming that the relevant interest rate is 10%, which option should Jerry choose?

A) The options are equivalent.
B) Insufficient information to determine.
C) The signing bonus of £23,000 payable on the first day of work.
D) The signing bonus of £26,000 payable after one year of employment.
Items 56 through 58 apply to the appropriate use of interest tables. Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 56 to 58 is based on 8% interest compounded annually.