Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quvon is using some of the skills in his manufacturing decision class to determine the value of his college education. He figures that he is

image text in transcribed
Quvon is using some of the skills in his manufacturing decision class to determine the value of his college education. He figures that he is going to spend $18,136 per year for four years to obtain his education. For ease of calculation he assumes $18, 136 on day one and the rest at the end of each year. Well, then Quvon will graduate and he figures on the conservative side, that he will earn $20,000 more in salary with his degree for the next twenty years. Allow year 4 to have "zero extra" while you graduate and pet settled. For year 5 and beyond, up until 20 years, plus $20,000 at the end of year will be preserle Of course, he may work more than 20 years but this is all that he wants to project. Also, with his degree he will obtain raises more readily, but that is also not in the model At a personal hurdle rate of 15%, what is his net present value? (whole number in dollars will be fine Is he actually earning 15% or more on his investment (yes or no)? What is his actual internal rate of return? (xx.x% will work. Only one decimal is needed) Given that he will be working more than 20 years is his return more or less than you just calculated

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Principles Of Auditing

Authors: Hugo Romero

1st Edition

1632409372, 978-1632409379

More Books

Students also viewed these Accounting questions