I don't anyone to write the paper for me. I just need help understanding how to do the net present value analysis.

Quesion:

Assume a student is planning to pursue a two-year masters degree in computer information systems. There are two educational options the student is considering, with investment and cash flows as follows.

Option A: Full-Time Education

Example cash investment: $100,000. Currently the student is earning $30,000. Upon graduation the student hopes to earn $60,000 per year in new job. The student will quit his/her current job.

Option B: Part-Time Education

Currently the student is earning $30,000. The student can work part-time for three years at a salary of $20,000 while studying towards the masters degree in project management. Upon graduation the student anticipates a possible increase in salary by $10,000 (total $40,000) in the same company.

The requirements for the assignment are:

Answer the following questions based on the unit readings:

1. Briefly describe what net present value is, how it is calculated, and what it is used for.

2. Calculate the NPV for each educational option. The discount rate is 8%.

3. Which option should the student choose? Explain your decision including any necessary assumptions made.