Question
How much is an MBA worth? Assume that you were earning $40,000/year before entering 2-year full time MBA program and that tuition costs are $16,000/year.
How much is an MBA worth?
Assume that you were earning $40,000/year before entering 2-year full time MBA program and that tuition costs are $16,000/year. Expected salary is $54,000/year after graduation. You can invest money at 8%.
Assume that you will work 30 years after graduation, and that the salary differential ($14,000 = $54,000- $40,000) will continue through this period.
For simplicity, assume that the first payment of $16,000 has to be made at the start of the program and the second payment one year later.
What is the present value of getting an MBA?
Please solve showing all intermidiae steps and final answer.
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