1.Stacy's undergraduate degree allowed for her current job making $45,000 plus health benefits for her and her family, including 2 children.However, she would like to accelerate her career and is contemplating an MBA.Knowing you are just finishing your first year, she reaches out to you for help with her analysis.Astutely, you collect the following information.

2.Stacy's is 30 years old and would like to retire at age 60.

During the first year of her retirement she plans to spend $30,000 expecting that amount to grow at the same annual rate of inflation until her expected death at age 90.

She currently has no student loans, but she just purchased a house with monthly mortgage payments of $1,500 per month scheduled for the next 30 years when it will be paid off.

Not including her mortgage, her current monthly expenses for her and her family total $1,500.She puts all remaining money (if any) in her retirement account.It has a current balance of $50,000.She expects that retirement account to grow at a rate of 8% until her retirement, at which time she estimates she will shift the allocation more conservatively expecting a 6% annual return since that will be her only source of income until her death.

Her current average tax rate is 25%, which is assumed to continue until her death.

She expects her living expenses to grow with inflation, which is projected to be at 2.75% per year throughout her life.

The three programs in which she was accepted:

oX University: total cost: $25,000; placement 90%; first year average salary: $60,000

oY University: total cost: $50,000; placement 95%; first year average salary: $65,000

oZ University: total cost: $15,000; placement 80%; first year average salary: $50,000

Stacy would either need to get a loan to pay for the entire amount or tap into her retirement account to pay for the MBA.Student loan rates are currently 6.8% for a duration of 12 years.Interest starts accruing after she graduates, which expected to take two years.

Due to past history, Stacy feels that salaries in the US will grow on average of 4% over the next 30 years.

Stacy (and I) assume you went through (at least) this level of analysis when you decided to join the X University MBA program. What advice would you give Stacy?Please make sure you include:

A.Which program should she join, if any?

B.Should she take out a loan or tap into her retirement account, or both? (She has no other savings or access to money.)

C.Is there any other information that is relevant to this decision?Clearly define all the assumptions you used.

D.All your calculations clearly shown.

E.Is there any other, including qualitative information, that may be material to this decision?