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 and Internet. This job pays $ 40,000 per year. The second job is far away from your​ parents' house, so​ you'll have to rent an apartment with parking​($ 12,000 per​ year), buy your own food ​($ 3,500 per​ year), and pay for your own cable and Internet ​($ 600 per​ year). This job pays $45,000 per year. You still plan to do laundry at your​ parents' house once a week if you live in the​ city, and you plan to go into the city once a week to visit with friends if you live at home.​ Thus, the cost of operating your car will be about the same either way. In​ addition, your parents refuse to pay for your cell phone service ​($ 770 per​ year).

.	Based on this information​ alone, what is the net difference between the two alternatives​ (salary, net of relevant​ costs)?
2.	What information is​ irrelevant? Why?
3.	What qualitative information is relevant to your​ decision?
4.	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 into your​ decision?

Answer 1