100% v $ % .0 .00 123 - Default (Ari... 10 BISA 17 fx A B C D E F G H I J K 1 N You are 30 years old today and are considering studying for an MBA. You have just received W your annual salary of $50,000 and expect it to grow by 3% per year (without earning an MBA). 4 MBAs typically earn $80,000 per year upon graduation, with salaries growing by 4% per year. 5 The MBA program you're considering is a full-time, 2-year program that costs $30,000 per year, 6 payable at the end of each study year. You want to retire on your 65th birthday, 35 years from today The relevant discount rate is 8%. Is it worthwhile for you to quit your job for two years in order to pursue an MBA? 9 10 11 Current salary 50,000 Growth Rate: 3.00% 12 MBA Starting Salary 80,000 Growth Rate: 4.00% 13 MBA Tuition 30,000 Discount rate: 8.00% 14 15 PV of MBA 16 PV of normal tuition and Age (at birthday) Year Normal Salary salary MBA Tuition MBA salary salary 17 30 0 50,000 18 31 19 32 20 33 21 34 22 35 OUI A 23 36 + & Overview Q1 - Q2 Q3 Q4 Q5 Q6 Q7