Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

|.2 After graduating from PolyU and working full time for three years, Peter decided topursue further study for a postgraduate degree. He has received the

image text in transcribed
|.2 After graduating from PolyU and working full time for three years, Peter decided topursue further study for a postgraduate degree. He has received the offers from three postgraduate programmes with details as follows: (1) Part-time programme A: The tuition fee is $0.3 million and Peter will receive a benefit of $0.9 million from the programme. He can keep his job and work full time when studying for this programme. (2) Full-time programme B: The tuition fee is $0.4 million and Peter will receive a benefit of $1 .5 million from the programme. However, he has to forgo the income of $0.6 million when studying for this programme. In addition, the programme gives Peter a scholarship that equals 50% of the tuition fee. (3) Full-time programme C: The tuition fee is $0.3 million and Peter will receive a benefit of $1 .5 million from the programme. However, he has to forgo the income of $0.6 million when studying for this programme. In addition, the programme gives Peter a scholarship that equals 40% of the tuition fee. For simplicity, assume there are no additional benefits and costs other than those mentioned above. Calculate the economic surplus received from each programme. Which is the first-best programme for Peter based on your calculation? What is the minimum scholarship (in dollar term) offered by programme A such that Peter finds it indifferent between programme A and his first-best programme that you answer in part (a) above? Please show your calculation. After Peter has paid a non-refundable deposit of $0.1 million to the first-best programme that you answered in part (a) above, he receives the notification from programme A that the programme will give him a scholarship of $0.2 million. Explain whether Peter should shift to study for programme A

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Libby, Short

6th Edition

978-0071284714, 9780077300333, 71284710, 77300335, 978-0073526881

More Books

Students also viewed these Accounting questions

Question

2. Does the organisation take a process perspective?

Answered: 1 week ago