You receive two job offers in the same big city. The first job is close to your

Question

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 won’t have to incur expenses for housing, food, or cable TV. This job pays $49,000 per year. The second job is far away from your parents’ house, so you’ll have to rent an apartment with parking ($9,000 per year), buy your own food ($3,500 per year), and pay for your own cable TV ($550 per year). This job pays $54,000 per year.

You still plan to do laundry at your parents’ house one time a week if you live in the city and plan to go into the city one time a week to visit with friends if you live at home. As a result, the cost of operating your car will be about the same either way. Additionally, your parents refuse to pay for your cell phone service ($690 per year), and you can’t function without it.

Based on your reading, answer the given questions:

What is the net difference between the two alternatives—salary and net of relevant costs?

What information is irrelevant? Why?

What qualitative information is relevant to your decision?

Assume you really want to take Job #2, but you also want to live at home to cut costs. What new quantitative and qualitative information will you need to incorporate in your decision?

Explanation / Answer

B)information of cost related to phone is irrelevant it will be incurred irrespective of which job he pick

c)Allowed to live for one year in his parent shome

d)he need to include the cost of operating car to and fro from his rented apartment to the place of his job

Alternative 1 Alternative 2 Salary $49,000 $54,000 less:rent (9,000)     Food (3,500) Cable tv (550) Net 49,000 $40,950

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