If Company a and Company B Pay the Same Total

question 19

Multiple Choice

If Company A and Company B pay the same total compensation for a job,which of the following is most likely true?

• A) Base pay is same
• B) Benefits costs are the same
• C) The pay mix differs
• D) The pay mix is the same

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Definitions:

IRR

The Internal Rate of Return; a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Salvage Value

The foreseen market valuation of an asset at the lifespan’s end.

Present Values

The now-value of a forthcoming financial amount or cash flow pattern, discounted at a fixed rate of return.

Net Present Value Method

A financial analysis tool used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows.