Marlene Judd is a 55-year-old science teacher at Lamar Tech. She is considering leaving the teaching profession next year and going to graduate school to earn a master’s degree in business administration

(MBA). Judd plans to attend a prestigious university as a full-time student. The MBA takes two full years to complete with annual tuition of $40,000 and annual living costs of $30,000 (the same as her current living costs).

~~Judd’smnual salary upon graduation is anticipated to be $80,000 and likely will increase at 5 percent per year. This year she will earn $48,000 at Lamar Tech; expected pay raises in teaching are 2 percent annually.

Required

a. Is there an opportunity cost in this situation? If so, how much?

b. Calculate the real cost of attending school for two years and attaining the degree.

c. What options might Judd consider to reduce the degree’s real cost?

d. What other factors should Judd consider in her decision to attend graduate school