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Doogie lives for four periods. He has just completed the first period of his life (by getting his high school diploma). Doogie is trying to
Doogie lives for four periods. He has just completed the first period of his life (by getting his high school diploma). Doogie is trying to decide on his future career path. Hes very good at opening things up and fixing them, so he has narrowed his options to two possible paths. He will either become an auto mechanic or a brain surgeon. If Doogie becomes an auto mechanic, he will earn $25,000 as an apprentice in period 2, $50,000 as a solo mechanic in period 3, and $75,000 as a master mechanic (with apprentice) in period 4. If Doogie becomes a brain surgeon, he will pay $50,000 to attend college in period 2, another $75,000 to attend medical school in period 3, and will earn $300,000 in period 4. Doogie must make all tuition payments at the beginning of each period, he is paid at the end of every period, and he can borrow and lend at a rate of 8% per period. a. What is the present discounted value (PDV) of Doogies possible career paths? If Doogie wants to maximize the PDV
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