Assignment:
(Calculate with Excel only) Consider Carl, a 26 year old native San Diegan who has just graduated with a B.A. in Economics. He has received two job offers, one in Irvine that pays him $40,000/year and another in Miami, Florida that will pay him $44,000/year. He is planning on working in the position, regardless of the location, until he finishes his 20th year of work. His added monetary costs in Miami will be $2,500 each year and he expects psychic costs totaling $5,000 the first 5 years only. He can borrow/save at a rate of 3.2%. Using the information provided and assuming all costs and benefits are incurred/accrued at the end of each year determine the following:
a. Calculate the net present value of his migration (round to hundredths).
b. Calculate the internal rate of return of his migration (round to hundredths).
c. Based on the NPV and IRR, should he migrate? Why?