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 and Internet. This job pays $ 41 comma 000 per year. The second job is far away from your parents' house, so you'll have to rent an apartment with parking ($ 12 comma 000 per year), buy your own food ($ 3 comma 000 per year), and pay for your own cable and Internet ($ 800 per year). This job pays $ 46 comma 000 per year. You still plan to do laundry at your parents' house once a week if you live in the city, and you plan to go into the city once a week to visit with friends if you live at home. Thus, the cost of operating your car will be about the same either way. In addition, your parents refuse to pay for your cell phone service ($ 770 per year).

Based on this information alone, what is the net difference between the two alterratives salary, net Salary Less: Relevant expenses Salary, net of relevant costs)?
2. What infomation is irrelevant? Why?
3. What qualitative information is relevant to your decisicn?
4. Assume you really want to take Job #2, but you also want to live at home to cut costs what new quanttative and quaitetive intormation will you need to incorprate into your decision?

1. The net difference between the alternative salary will be; home based job total value $56,030 less Non home based job total value $29,430 =$26,600 (being total gain or salcing for taking up the home based job after deducting all relevant costs). See explanation 1. Note that working from home save you $23,000 for just one year. If in the next year your parents decides you have to rent your own appartment, pay your utility bills and buy your food, your annual saving may fall down to $17,230. compared to the city job annual savings of $29,430.

2. The relevant information include;

(a) job security. why this is important is to help you know how long you can stay in the job in the city or at home.

(b) Family plan about your continue stay at home and paying for your bills. This information is relevant because it will assist in deciding if to stay for more than a year or not.

3. The relevant qualitative information will be;

(a) Will you have the peace of mind you desire working and living with your parents.

(b) Will you like the quality of life and level of privacy needed if you work and live with your parents.

(c) Can you give your bast to your work if you live in your parents house while working?

(d) Do you love the work close to home or the one far away from home

4. (i) If there is a cheaper and faster means of getting to work from home

(ii) If there is a possiblility of moving in with any of my friends and come home on weekends.

Explanation:

1. The analysis of the home and city based job will be;

Home based Non home based

Official offer salary $41,000 $46,000

Relevant costs;

Rent (saved) $12,000 (spent) ($12,000)

Food (saved) $3,000 (spent) ($3,000)

Cable&internt (saved) $8,000 (spent) ($8,000)

Cell phone se (saved) ($770) (spent) ($770)

Net $56,030 $29,430

Note that working from home save you $23,000 for just one year. If in the next year your parents decides you have to rent your own appartment, pay your utility bills and buy your food, your annual saving may fall down to $17,230. compared to the city job annual savings of $29,430.