Question
Amy works as a Real Estate Agent in Toronto, Ontario. She has applied for admission to the MBA program at Cape Breton University. If accepted,
Amy works as a Real Estate Agent in Toronto, Ontario. She has applied for admission to the MBA program at Cape Breton University. If accepted, Amy will resign from her job in Toronto and move to Sydney, Nova Scotia. Amy has assembled the following data to help her make the decision: Amys annual salary $68,000 Annual Tuition and fees 14,000 Annual book and school supplies expense 3,000 Monthly living expenses in Toronto 800 Monthly living expenses in Sydney 1,600 Monthly auto expenses in Toronto 350 Monthly auto expenses in Sydney 350 Cost of two business suits (clothing) purchased just prior to resigning 600 Moving Expenses 5,500
Required: A) Calculate the following in the context of Amys decision: a. Total sunk costs (if any) b. Total differential or incremental costs (if any) c. Total opportunity costs (if any) B) What is your best estimate of the total cost to Amy of earning an MBA degree if it will take her 12 months to complete the program? C) Suppose you are Amy. What specific additional information would you need in order to make a rational decision to pursue and successfully complete the MBA program at Cape Breton University. Explain.
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