Group project $2$: Personal investment analysis $(E,p674,$#$15-2$

A Masters of Accountancy degree at Jalapeno University would cost $$15,000$ for an additional

fifth year of education beyond the bachelor's degree. Assume that all tuition is paid at the

beginning of the year. A student considering this investment must evaluate the present value of

cash flows from possessing a graduate degree versus holding only the undergraduate degree.

Assume that the average student with an undergraduate degree is expected to earn an annual

salary of $$50,000$ per year $($assumed to be paid at the end of the year$)$ for $10$ years. Assume that

the average student with a graduate Masters of Accountancy degree is expected to earn an annual

salary of $$65,000$ per year $($assumed to be paid at the end of the year$)$ for nine years after

graduation. Assume a minimum rate of return of $10\%.$

Determine the net present value of cash flows from an undergraduate degree. Use the present

value tables provided in this chapter. Round to nearest dollar.

Determine the net present value of cash flows from a Masters of Accountancy degree,

assuming no salary is earned during the graduate year of schooling. Round to nearest dollar.

What is the net advantage or disadvantage of pursuing a graduate degree under these

assumptions?