Jerry Recently Was Offered a Position with a Major Accounting

question 23

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.

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Definitions:

Criterion-related Validity

The extent to which a test successfully measures an operational variable and can predict a criterion or outcome.

Validity

The extent to which a test, measurement, or research accurately reflects or assesses the specific concept it is intended to measure.

Job Performance

The degree to which an employee successfully fulfills the roles, responsibilities, and tasks of their job position.

Validity

The accuracy with which a test or measurement assesses what it intends to measure.