Samir is satisfied with his job but wants to decide where to do his MBA at UTM or UTP so that he can become an entrepreneur and have his own business.

Both UTM and UTP encourage internships to get class credit but salary will not be paid and also both do not allow Samir to work during the MBA period.

Samir currently works at Data Routine and gets a salary of $ 60,000 per year where his salary is expected to grow at 3% every year until retirement. He is 28 years old and expects to work for 40 more years. He gets fully paid health insurance plan and an average tax rate of 26%. He has a savings account with enough money to pay for his MBA program.

UTM offers 2 year FULL TIME MBA WHERE TUTION FEES IS $ 65,000 PER YEAR to be paid at the beginning of each year. Books and other supplies cost is 3000 $ per year. Samir expects after 2 years economy will pick up and his business venture will generate 110000 $ per year and he will get a one time grant of $20000 from the government entrepreneurial program. Income from business will increase at 4% per year. Income tax rate will be 31%

UTP offers 1 yea FULL TIME MBA WHERE TUTION FEES IS $ 80,000 PER YEAR to be paid at the beginning of each year. Books and other supplies cost is 4500 $ per year. Samir expects after 1 year economy will pick up and his business venture will generate 92,000 $ per year and he will get a one time grant of $18,000 from the government entrepreneurial program. Income from business will increase at 3.5% per year. Income tax rate will be 29%

Both universities offer health insurance that will cost 3000 $ per year payable at beginning of the year. Samir estimates that room and boarding expenses will cost $ 2000 more at both university than his current expenses payable at beginning of the year. The appropriate discount rate is 6.5%

Question 1a Assuming all cash inflow salary and business income are received at the end of each year what is the best option for Samir from a strictly financial standpoint? Continue his job or do MBA from UTM or do MBA from UTP?

Question 1 B What initial salary would Samir need to receive to make him indifferent between pursuing his MBA at UTM and staying in his current job with data routine?