Question: One aspect of obtaining a college education is the prospect of improved future earnings in comparison to non-college graduates. Sharon Shay estimates that a college

One aspect of obtaining a college education is the prospect of improved future earnings in comparison to non-college graduates. Sharon Shay estimates that a college education has a $28,000 equivalent cost at graduation. She believes the benefits of her education will occur throughout 40 years of employment. She thinks that during the first 10 years out of college, her income will be higher than that of a non-college graduate by $3000 per year. During the subsequent 10 years, she projects an annual income that is $6000 per year higher. During the last 20 years of employment, she estimates an annual salary that is $12,000 above the level of the non-college graduate. If her estimates are correct, what rate of return will she receive as a result of her investment in a college education?

Step by Step Solution

★★★★★

3.41 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

PW of Cost PW of Benefits 28000 3000 PA i 10 6000 PA i 10 PF i 10 12000 PA i 20 ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

7-B-E-M (112).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

you will reassess your knowledge of our impact on the environment and how we can lower this impact. What do you know about sustainability? What can you do to lower your ecological footprint?

Despite tuition skyrocketing, a college education is still valuable. Recent calculations by the Federal Reserve Bank in San Francisco demonstrate a college degree is worth $800,000 in lifetime...

Last year Beth's annual salary was $38,350. This year she received a promotion and now earns $46,462 annually. She is paid biweekly. a. What was her biweekly salary last year? b. What is Beth's...

What might the company do to improve its competitive position? Describe options and the strategic advantage(s) of these options. Consider both competitive and cooperative options. What is your...

Week 5 Discussion: Valuing household work 1414 unread replies.1414 replies. In developed countries, the value of household work is generally not included in GDP. Part of the reason is that there is...

Students will find the York City Case Study provided for review. There is a maximum of three pages in this work. All ethical decisions affect others (by definition) and, as Aristotle points out,...

Journal of Information Technology Education Volume 6, 2007 The Delphi Method for Graduate Research Gregory J. Skulmoski Zayed University, Dubai, United Arab Emirates Francis T. Hartman and Jennifer...

2012 Annual Report Our \"bottom line\" ultimately depends on our ability to satisfy all of our stakeholders. Our goal is to balance the needs and desires of our customers, team members, shareholders,...

4. Using the financial ratios provided by eVal, evaluate any trends in Royal Caribbean?s return on equity, compare it with Carnival Cruise?s return on equity, and discuss the main causes of any...

Computer Whiz Pty Ltd (Computer) has four directors. Charlie is one of the directors. Computers constitution provides that all transactions over $5,000 need to be approved by a majority of directors....

Write a paper in which you address the following: Describe the process how you do the procedure of disaster management website.

2. Which of the following is a data item whose value does not change during run time? a. literal constant b. literal variable c. named constant d. variable

Sugarco can manufacture three types of candy bar. Each candy bar consists totally of sugar and chocolate. The compositions of each type of candy bar and the profit earned from each candy bar are...

When a particle undergoes a uniformly / decelerated motion, with acceleration / a, travelled at constant delta t increase / decrease at constant a*(delta t) squared 1. When a particle undergoes a...

QUESTION 3 the childs pushing force A book rests on top of the table and a child starts pushing the book across the table top. Which forces must not appea r on the free body diagram of the book? ....

Question # 4. Describe the purposes of planning. Explain what studies have shown about the relationship between planning and performance.

Question # 2. What kind of workplace would Henri Fayol create? How about Mary Parker Follett? How about Frederick W. Taylor?

BE15.5 (LO 2) Parsons SpA issued 3,000 1,000 bonds at 98. Each bond was issued with one detachable share warrant. At issuance, the net present value of the bonds without the warrants was 2,910,000....

The cash flows for two small raw water treatment systems are shown. Determine which should be selected on the basis of an annual worth analysis at 10% per yearinterest. MF UF First cost, S Annual...

PGM Consulting is under contract to Montgomery County for evaluating alternatives that use a robotic, liquid-propelled "pig" to periodically inspect the interior of buried potable water pipes for...

TT Racing and Performance Motor Corporation wishes to evaluate two alternative CNC machines for NHRA engine building. Use the AW method at 10% per year to select the betteralternative. First cost, S...

The maintenance and operation (M&O) cost of front-end loaders working under harsh environmental conditions tends to increase by a constant $1200 per year for the first 5 years of operation. For a...

You work for Midstates Solar Power. A manager asked you to determine which of the following two machines will have the lower (a) Capital recovery (b) Equivalent annual total cost. Machine Semi2 has a...

En 2019, Colin y Laura vendieron su casa por $990 000. Pagaron $40,000 en gastos por lo que sus ganancias son $950,000. Compraron la casa en 2013 y pagaron $300 000 por la casa y gastaron $30 000...