CURRENT JOB | ||||||||||
Present Salary (paid in year1) | $70,000 | |||||||||
Tax Rate | 22% | |||||||||
After tax salary in year1 | $54,600 | (70000*(1-0.22) | ||||||||
After tax salary in year2 | $56,511 | (54600*1.035) | ||||||||
After tax salary in year(N+1)=1.035*After tax Salary in Year(N) | ||||||||||
ARRINGTON UNIVERSITY OPTION | ||||||||||
Total annual expenses in Year0 | $76,000 | (60000+3000+6000+5000)+moving expense 2000 | ||||||||
Total annual expenses in Year1 | $74,000 | (60000+3000+6000+5000) | ||||||||
Annaul Salary in 3 | $100,000 | |||||||||
After tax salary in Year3 | $70,000 | (100000*(1-0.30) | ||||||||
After tax salary in Year4 | $73,150 | (75900*1.045) | ||||||||
After tax salary in year(N+1)=1.045*After tax Salary in Year(N) | ||||||||||
Signing Bonus in Year2 | $20,000 | |||||||||
BOYDEN COLLEGE OPTION | ||||||||||
Total annual expenses in year 0 | $67,000 | (50000+4000+6000+5000)+moving expense 2000 | ||||||||
Annaul Salary in 2 | $85,000 | |||||||||
After tax salary in Year2 | $63,750 | (85000*(1-0.25) | ||||||||
After tax salary in Year3 | $66,300 | (63150*1.04) | ||||||||
After tax salary in year(N+1)=1.04*After tax Salary in Year(N) | ||||||||||
Signing Bonus in Year1 | $10,000 | |||||||||
Present Value of Cash Flow=(Cash Flow)/((1+i)^N) | ||||||||||
i=discount rate =7.1%=0.071 | ||||||||||
N=Year of Cash Flow | ||||||||||
1 | If her iage is lower, the net benefit will be higher | |||||||||
2 | Best Option: MBA from JENSEN COLLEGE(Boyden University) | |||||||||
Total Value of Current Job | $972,895 | |||||||||
Total Value of Arrington MBA | $1,040,022 | |||||||||
Total Value of Boyden MBA | $1,043,239 | |||||||||
N | Continue Current Job | ARRINGTON OPTION | BOYDEN COLLEGE OPTION | |||||||
CF1 | PV1=CF1/(1.071^N) | CF2 | PV2=CF2/(1.071^N) | CF3 | PV3=CF3/(1.071^N) | |||||
Year | Cash Flow | Present Value | Cash Flow | Present Value | Cash Flow | Present Value | ||||
0 | ($76,000) | ($76,000) | ($67,000) | ($67,000) | ||||||
1 | $54,600 | $50,980 | ($74,000) | ($69,094) | $10,000 | $9,337 | ||||
2 | $56,511 | $49,267 | $20,000 | $17,436 | $63,750 | $55,578 | ||||
3 | $58,489 | $47,611 | $70,000 | $56,981 | $66,300 | $53,969 | ||||
4 | $60,536 | $46,010 | $73,150 | $55,598 | $68,952 | $52,407 | ||||
5 | $62,655 | $44,464 | $76,442 | $54,248 | $71,710 | $50,890 | ||||
6 | $64,848 | $42,969 | $79,882 | $52,931 | $74,578 | $49,417 | ||||
7 | $67,117 | $41,525 | $83,476 | $51,646 | $77,562 | $47,987 | ||||
8 | $69,466 | $40,129 | $87,233 | $50,392 | $80,664 | $46,598 | ||||
9 | $71,898 | $38,780 | $91,158 | $49,169 | $83,891 | $45,249 | ||||
10 | $74,414 | $37,477 | $95,260 | $47,975 | $87,246 | $43,939 | ||||
11 | $77,019 | $36,217 | $99,547 | $46,811 | $90,736 | $42,667 | ||||
12 | $79,714 | $35,000 | $104,027 | $45,674 | $94,366 | $41,432 | ||||
13 | $82,504 | $33,823 | $108,708 | $44,565 | $98,140 | $40,233 | ||||
14 | $85,392 | $32,686 | $113,600 | $43,484 | $102,066 | $39,069 | ||||
15 | $88,381 | $31,588 | $118,712 | $42,428 | $106,148 | $37,938 | ||||
16 | $91,474 | $30,526 | $124,054 | $41,398 | $110,394 | $36,840 | ||||
17 | $94,676 | $29,500 | $129,636 | $40,393 | $114,810 | $35,773 | ||||
18 | $97,989 | $28,508 | $135,470 | $39,412 | $119,403 | $34,738 | ||||
19 | $101,419 | $27,550 | $141,566 | $38,456 | $124,179 | $33,732 | ||||
20 | $104,969 | $26,624 | $147,936 | $37,522 | $129,146 | $32,756 | ||||
Please show all work. Thank you I greatly appreciate your help! 4 Lexy Halliday graduated four...
THE MBA DECISION Lexy Halliday graduated four years ago with degrees in accounting and finance. She has been employed in the finance department at Thorvaldsen Conglomerated (TC) since graduation. She is satisfied with her current job, but is considering an MBA degree to increase her skills and her advancement prospects. She has examined a number of MBA schools. She has narrowed her choices to 1) staying in her current job, 2) getting an MBA at Arrington University (AU) or 3)...
please show work The MBA Decision Case Information #1 #2 #3 #4 Timeline for Growing Annuity THE MBA DECISION Lexy Halliday graduated four years ago with degrees in accounting and finance. She has been employed in the finance department at Thorvaldsen Conglomerated (TC) since graduation. She is satisfied with her current job, but is considering an MBA degree to increase her skills and her advancement prospects. She has examined a number of MBA schools. She has narrowed her choices to...
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Ben Bates graduated from college six years ago with a finance undergraduate degree. Since graduation, he has been employed in the finance department at East Coast Yachts. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to...
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David Jetter graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve his goal. After examining schools, he has narrowed his choice to either UCSD San Diego or Palomar College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships,...
Question6. suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision? THE MBA DECISION Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has...
THE MBA DECISIONBen Bates graduated from college six years ago with a finance undergraduate degree. Since graduation, he has been employed in the finance department at East CoastYachts. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal.After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to...
Adina, age 32, is a married architect with one child. Her salary has reached a plateau at $85,000 a year. She believes that if she pursues an MBA degree full-time, she would move into a managerial position and her salary would rise by $60,000 a year. Adina wants to maintain her current lifestyle, which already generates substantial yearly cash savings and accumulate the capital to leave to her son. Her MBA course would take two years to complete and cost...
Adina, age 32, is a married architect with one child. Her salary has reached a plateau at $85,000 a year. She believes that if she pursues an MBA degree full-time, she would move into a managerial position and her salary would rise by $60,000 a year. Adina wants to maintain her current lifestyle, which already generates substantial yearly cash savings and accumulate the capital to leave to her son. Her MBA course would take two years to complete and cost...