QUESTION 6 From: Principles of Finance with Excel 3rd ed, Benninga and Mofkadi, O 2018, 2011, 2006 You are 30 years old today and are considering studying for an MBA. You have just received your annual salary of $50,000 and expect it to grow by 3% per year. MBA's typically earn $80,000 upon graduation with salaries growing by 4% per year. If you choose to attend MBA school, you would start today in one year (31st birthday.) The MBA program you are considering is a full time 2 year program that costs $30,000 per year, payable at the end of each year. You want to retire on your 65th birthday. The relevant discount rate is 8%. Is it worthwhile to quit your job in order to do an MBA (ignore income taxes for now). Start the Cash Flows with 31st Birthday. Annual Salary No MBA: Salary Growth No MBA Cost of MBA/Year Annual Salary MBA: Salary Growth MBA: Discount Rate Given the NPV of the MBA > No MBA It is worthwhile to quit your job and enter into MBA school