Assignment 1 Managerial Finance 650-Ashford
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- Date Submitted: 03/26/2012 08:58 PM
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Assignment 1
Closing Case Chapter 4- MBA Decision
Keith C. Quarles
Managerial Finance
Robert Watson
3-26-12
1 Age can play a significant part in the decision whether to keep working or go back to school. A young person can go back to school and still have time to chase a career whereas an older person would have a smaller window of opportunity and may not as willing to chance giving up their livelihood to get a degree. The opportunity costs of leaving the job may be equated in the coming years after graduating considering the added value to the marketability of the student once a degree is attained as reflected in a higher base salary than the previous job which would make the investment a worthy endeavor. Of course the cost of tuition must be added in as an explicit costs.
2 . Maybe the most notably important non quantifiable aspect of the decision is marital status. Other opportunity costs are involved implicitly; namely, quality time with loved ones and the finances toward school that could be used to care for the family. The opportunity costs can be implicitly affected by the individual perception of the value of the alternative(s) foregone versus. the one chosen..
3 He has three choices; remain at his current job, pursue a Wilton M.B.A. or pursue a Mt. Perry M.B.A.
Stay at current job:
After tax salary =$55,000 (1-.26 )=$40,700
Given that his salary will grow 3 percent each year the present value of his after-tax salary is :
Pv = Cost
Pv= $857, 343.20
Wilton MBA :
The direct/explicit costs of attending Wilton are the costs of tuition ,books, health insurance, room and board and other supplies.
The present value of t he direct costs are :
P V of direct expenses = ($65,000 +2,500+3,000+2,000)
+ ($65,000+2,500 +3,000 +2,500) /1.065
Pv of direct costs = $140,575.12
Next for the lost salary's...
Closing Case Chapter 4- MBA Decision
Keith C. Quarles
Managerial Finance
Robert Watson
3-26-12
1 Age can play a significant part in the decision whether to keep working or go back to school. A young person can go back to school and still have time to chase a career whereas an older person would have a smaller window of opportunity and may not as willing to chance giving up their livelihood to get a degree. The opportunity costs of leaving the job may be equated in the coming years after graduating considering the added value to the marketability of the student once a degree is attained as reflected in a higher base salary than the previous job which would make the investment a worthy endeavor. Of course the cost of tuition must be added in as an explicit costs.
2 . Maybe the most notably important non quantifiable aspect of the decision is marital status. Other opportunity costs are involved implicitly; namely, quality time with loved ones and the finances toward school that could be used to care for the family. The opportunity costs can be implicitly affected by the individual perception of the value of the alternative(s) foregone versus. the one chosen..
3 He has three choices; remain at his current job, pursue a Wilton M.B.A. or pursue a Mt. Perry M.B.A.
Stay at current job:
After tax salary =$55,000 (1-.26 )=$40,700
Given that his salary will grow 3 percent each year the present value of his after-tax salary is :
Pv = Cost
Pv= $857, 343.20
Wilton MBA :
The direct/explicit costs of attending Wilton are the costs of tuition ,books, health insurance, room and board and other supplies.
The present value of t he direct costs are :
P V of direct expenses = ($65,000 +2,500+3,000+2,000)
+ ($65,000+2,500 +3,000 +2,500) /1.065
Pv of direct costs = $140,575.12
Next for the lost salary's...