Should I stay or should I go? Go only if the answer to A) is more than 5,000. So what is that value?
Convert the raises to dollar amounts:
A - 10% of 60,000 = 6,000. (This is close to 5k, we should already be skeptical that staying for a raise is better because this is the best he can do)
B - 3% of 60k is 1,800
C - 2% only gets him 1,200
Now the rest is based on his probability of getting a raise multiplied by the raise amount. Think of each raise as being"weighted" by that probability.
6000*.7 + 1800*.2 + 1200*.1
4200 + 360 + 120 = 4,680
So logically the economic average value of staying at his current job is $4,680, which is less than 5k and thus he should leave. This is interesting because we might think that most of the time, Bob will make more by staying ( 70% chance). However, the risk of those tiny 2&3% raises makes the surefire 5k raise a better deal.
What Bob doesn't realize is the accounting industry will work him to death