A recent high school graduate has been offered a job at the local supermarket paying

$15,000 per year. She believes that if she were to graduate from college her annual earnings would be $6000 more than what she could make from the supermarket job.

A three-year degree course would cost her $3000 per year in fees, textbooks and other expenses. Assuming a zero rate of discount, and making explicit any other assumptions that you consider necessary, answer the following questions:

i What dollar amount measures her annual opportunity cost of attending college?

ii Construct the net benefit stream expected from her investment in education.

iii Explain how you would estimate the net present value of her proposed investment in education.

iv What dollar amount is your best estimate of the net present value?