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Hello, please do A,B, and C! thank you in advance! ill make sure to leave a thumbs up (Comprehensive Problem) Suppose that you are in

Hello, please do A,B, and C! thank you in advance! ill make sure to leave a thumbs up image text in transcribed
(Comprehensive Problem) Suppose that you are in the fall of your senior year and are faced with the choice of either getting a job when you graduate or gong to law school. Of course, your choice is not purely financial. However, to make an informod decision you would twe to know the financial implications of the two alternatives. Lers assume that your alternatives are as follows: If you take the "get a job" route you expect to start off with a salary of $40,000 per year. There is no way to predict what will happen in the future, your best guess is that your salary wit grow at 5 percent per year unblyou retre in 40 years. As a law student, you will be paying $30,000 per year tuition for each of the 3 years you are in graduate school. However, you can then expect a job with a starting salary of $70.000 per year. Morecver, you expect your salary to grow by 8 percent per year until you retire 34 years later. Clearly, your total expected lifetime salary will be higher if you become a lawyer. However, the additional future salary is not free. You will be paying $30,000 in fuition at the beginning of each of the 3 years of law school. In addition, you will be giving up a little more than $126,000 in lost income over the thee years of law school: $40,000 the first year, $42,000 the second year, and 544,100 the third yoar. a. To start your analysis of whether to go to law school, calculate the present value of the future eamings that you will reakize by gaing directly to work, assume a discount rate of 11 peroint. b. What is the presont value today of your future earnings if you decide to athend law school, assuming a discount rate of 11 percent? Remember that you will be in law school for 3 years before you start to work as a lawyer. (Hint assume that you are paid at the end of each year so that your frist salary payment if you decide to go to law school occurs 4 years from now.) c. If you pay your law school tuision at the beginning of each year, what is the present value of your tuition, assuming at discourt rate of 11 percent

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