Mackenzie Dell graduated from university six years ago with an undergraduate degree in finance. Although she is satisfied with her current job, her goal is to become aninvestment banker. She feels that an MBA degree would allow her to achieve her goal. After examining schools, she has narrowed her choice to either Maple Leaf University or Stars and Stripes University. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Mackenzie currently works at the money management firm of Copper Sachs. Her annual salary at the firm is $68,000 per year, expected to increase at 2.5 percent per year until retirement. She is currently 28 years old and expects to work for 35 more years. Her current job includes a fully paid health insurance plan, and her current average tax rate is 26.5 percent. Mackenzie has a savings account with enough money to cover the entire cost of her MBA program. The Faculty of Management at Maple Leaf University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $55,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Mackenzie expects that after graduation from Maple Leaf, she will receive a job offer for about $110,000 per year, with a $15,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, her average income tax rate will increase to 30 percent. The School of Business at Stars and Stripes University began its MBA program 16 years ago and is less well known than Maple Leaf University's Faculty of Management. Stars and Stripes University offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon graduation. Books and other supplies for the program are expected to cost $4,500. Mackenzie thinks that she will receive an offer of $90,000 per year upon graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.25 percent per year. Her average tax rate at this level of income will be 28.5 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Mackenzie also estimates that room and board expenses will cost $2,000 more per year at both schools than her current expenses, payable at the beginning of each year. The appropriate discount rate is 6.5 percent. 1. What other, perhaps non-quantifiable, factors affect Mackenzie's decision to get an MBA? 2. Assuming all salaries are paid at the end of each year, which is the best optionfor Mackenziefrom a strictly financial standpoint. 3. Suppose, instead of being able to pay cash for her MBA, Mackenzie must borrow the money. The current borrowing rate is 4.8 percent. How would this affect her decision?