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Please post excel formulas for both receptionist and MBA.! Your analysis of the equipment project has created a reputation within the office as someone who
Please post excel formulas for both receptionist and MBA.!
Your analysis of the equipment project has created a reputation within the office as someone who knows how to evaluate financial projects. A colleague of yours, Pam Beasley, is asking you for financial planning advice regarding whether it makes more sense to continue with her career as a receptionist or go back to school to get an MBA. She just inherited $75,000 from a long lost relative which she can invest in a diversified equity fund earning 8% per year on average. She is currently earning $50,000 per year in her current position and she expects that to grow at 3% per year until she retires. If she goes back to get an MUA, it will cost her $25,000 per year for 3 years but when she graduates, she will be able to move into a better paying position which will pay $25,000 per year more than her current position and which will also be expected to increase by 3% per year until she retires. Pam is currently 30 years old; she would be 33 years old when she graduates from the MBA program and expects to retire at age 65 . She would be attending the MBA program at night, so she doesn't expect to lose any income while she is in school. Create a timeline in Excel for Pam analyzing her current situation with the alternative of going to get her MBA using the following assumptions: 1. Salaries for the year are paid only once, at the end of the year. 2. The salary increase for graduating from the MBA program would be effective immediately in the year she graduates. 3. Calculate the Net Present Value if Pam decides to stay in her current job. (hint: you decide 7% as an appropriate discount rate to discount the cash flows) 4. Calculate the Net Present Value if Pam decides to undertake the MBA program. 5. Based on your answers to questions 3 and 4 , what advice would you give her assuming the two choices are mutually exclusive, that is, she can only accept one Step by Step Solution
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