Use the Following Information to Answer the Question(s)below

question 5

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that you have received two job offers.Rearden Metal offers you a contract for $75,000 per year for the next two years while Wyatt Oil offers you a contract for $90,000 per year for the next two years.Both jobs are equivalent.Suppose that Rearden Metal's contract is certain,but Wyatt Oil has a 60% chance of going bankrupt at the end of the year.In the event that Wyatt Oil files for bankruptcy,it will cancel your contract and pay you the lowest amount possible for you to not quit.If you do quit,you expect you could find a new job paying $75,000 per year,but you would be unemployed for four months while searching for this new job.
-Assuming your cost of capital is 6 percent,the present value of your expected wage if you accept Rearden Metal's offer is closest to:

• A)$133,000.
• B)$138,000.
• C)$140,000.
• D)$144,000.

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Definitions:

Electromagnetic Coil

A coil used to generate a magnetic field when electricity is passed through it, often used in scientific and industrial applications.

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Therapeutic techniques using electrical impulses or magnetic fields to directly or indirectly stimulate specific areas of the brain to treat neurological or psychiatric conditions.

Serotonin

A neurotransmitter involved in the regulation of mood, appetite, and sleep, often associated with feelings of well-being and happiness.

Depression

A widespread and severe emotional disorder marked by continuous experiences of sorrow, despair, and a diminished interest or enjoyment in activities.