Suppose that instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision to get an MBA? $ Remain at Current Job After-Tax Salary: Discount Rate: Growth Rate: # of Periods PV Stay at current job 42,180.00 6.1% 3.0% 40 Total Value Difference $293,367.12 $ 945,100 Wilton Wilton MBA Direct Costs = Present Value of Direct Costs = $ 145,300.50 $ 132,893.50 Annual Tuition Books Health Ins Room & Board 1st Year Cost 2nd Year Cost $ $ $ $ $ $ 63,000.00 2,500.00 3,000.00 2,000.00 70,500.00 74,800.50 Salary After Bonus Increase Taxes Years $ 105,000.00 $ 18,000.00 4.00% 31.00% 38 Plus "gain" from getting an MBA After-Tax Bonus PV of After-Tax Bonus After-Tax Salary PV of New Salary Discount Rate Growth Rate Number of Periods PV of Salary in 3 years 12,420 $10,398.61 72,450 $1,836,007.92 6.1% 4.0% 38 $60,658.58 Total Value of a Wilton MBA = $1,713,513.03