After spending five years working for a prestigious consulting firm, Christine Kuhl enrolled in a top MBA

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After spending five years working for a prestigious consulting firm, Christine Kuhl enrolled in a top MBA program. Christine believes that obtaining an MBA is necessary to achieve her goal of becoming a partner in a major consulting firm. Christine is paying for her MBA (i.e., tuition, books, and living costs) with $25,000 in savings and a $45,000 loan. The MBA program requires four full trimesters of coursework; each trimester spans four months, including time for breaks. Most students complete the MBA program in 16 months.
Halfway into her third trimester, Christine’s ex-employer called and offered her an attractive two-month assignment that perfectly meshes with her interests and expertise. Because this is a rush job, her previous employer is willing to pay Christine $50,000 to complete the two-month assignment. Unfortunately, accepting the assignment would require Christine to drop her current classes and retake them the following trimester. Since the tuition and fees are nonrefundable, Christine will spend $8,000 to re-register for these classes. In addition, her graduation will be delayed by four months (one trimester).
Realistically, Christine estimates that she will earn a starting annual salary of $120,000 immediately upon graduating. Her current and future living expenses amount to $2,000 per month.

Required:
a. Based on the information provided, what is the net monetary benefit associated with accepting the assignment?
b. In your opinion, is the net monetary benefit large enough for Christine to accept the assignment? If not, what qualitative considerations are likely to guide Christine’s decision?

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Managerial accounting

ISBN: 978-0471467854

1st edition

Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin

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