Georges obtained a university degree in finance $6$ years ago. Although he is satisfied with his current job, his goal is to become an investment banker. He thinks an MBA will help him reach this goal. After examining the different programs, he stops his choice on two universities: The University of Wartone and the University of Mount Gill. Although both universities require that internships in companies be carried out, students cannot receive no salary during these training courses. Furthermore, apart from in$-$company internships, students are not allowed to work throughout their MBA, regardless of the chosen university. Georges currently works at Lala, a portfolio management company. He earns an annual salary of $$50,000,$ which increases each year by $3\%,$ until time of retirement. He is currently $28$ years old and plans to work for another $38$ years. In addition to the salary he receives, the Lala company pays him a health insurance program. The rate The tax rate to which Georges' salary is subject amounts to $26\%.$ The latter has currently have money in a bank account that is enough to pay the student's tuition fees MBA which he plans to pursue. The Demotel business school, attached to Wartone University, offers one of the best MBA programs nationwide. The latter is spread over $2$ years, while the tuition fees amount to $$60,000$ per year payable at the start of the school year. The budget planned for the purchase of books and other school supplies costs $$2,500$ per year. Georges hopes that after obtaining his MBA degree from Wartone University, he will be able to work for an annual salary of $$95,000,$ to which would be added a signing bonus $$15,000.$ In addition, the salary he would receive should grow at a constant rate of $4\%$ per year. year. Since Georges would receive a higher salary than today, the latter would be subject to a new tax rate of $40\%.$ The Retty Business School, attached to the University of Mount Gill, has started its MBA program $10$ years ago now. This school is smaller and less known than the Demotel business school. However, unlike the latter, it offers a accelerated MBA program which lasts only one year. Tuition fees are $$75,000$ for the year. The budget needed to purchase books and other school supplies amounts to $$3,500.$ After graduating from this school, Georges thinks he could work for an annual salary of $$78,000,$ plus a signing bonus of $$10,000.$ His salary should subsequently increase by $3\mathrm{.}5\%$ per year, until he decides to to retire. The tax rate to which his salary would then be subject would be $29\%.$ Both universities offer a health insurance program that costs $$300$ per year, payable at the start of the school year. In addition, Georges estimates that housing costs will amount to $$20,000$ per year regardless of the school. The appropriate discount rate is by $6\mathrm{.}5\%.$

CASE STUDY QUESTIONS

$3.$ Assuming that in all cases salaries are paid at the end of the year, what is the best solution for George?