The MBA DecisionBen Bates graduated from college six years ago with a finance undergraduate degree. Although he issatisfied with his current job, his goal is to become an investment banker. He feels that an MBA degreewould allow him to achieve this goal. After examining schools, he has narrowed his choice to eitherWilton University or Mount Perry College. Although internships are encouraged by both schools, to getclass credit for the internship, no salary can be paid. Other than internships, neither school will allow itsstudents to work while enrolled in its MBA program.Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is$$63,000$ per year, and his salary is expected to increase at $3$ percent per year until retirement. He iscurrently $28$ years old and expects to work for $38$ more years. His current job includes a fully paid healthinsurance plan, and his current average tax rate is $26$ percent. Ben has a savings account with enoughmoney to cover the entire cost of his MBA program.The Ritter College of Business at Wilton University is one of the top MBA programs in the country. TheMBA degree requires two years of full$-$time enrollment at the university. The annual tuition is $$78,000,$payable at the beginning of each school year. Books and other supplies are estimated to cost $$2,000$ peryear. Ben expects that after graduation from Wilton, he will receive a job offer for about $$97,000$ peryear, with a $$20,000$ signing bonus. The salary at this job will increase at $4$ percent per year. Because ofthe higher salary, his average income tax rate will increase to $31$ percent.The Bradley School of Business at Mount Perry College began its MBA program $16$ years ago. TheBradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated one$-$year program, with a tuition cost of $$95,000$ to be paid upon matriculation. Books and other supplies forthe program are expected to cost $$4,200.$ Ben thinks that he will receive an offer of $$98,000$ per yearupon graduation, with an $$17,500$ signing bonus. The salary at this job will increase at $3\mathrm{.}5$ percent peryear. His average tax rate at this level of income will also be $31$ percent.Both schools offer a health insurance plan that will cost $$3,000$ per year, payable at the beginning of theyear. Ben has also found that both schools offer graduate housing. His room and board expenses willdecrease by $$4,000$ per year at either school he attends. The appropriate discount rate is $5\mathrm{.}5$ percent.QUESTIONS$1.$How does Bens age affect his decision to get an MBA? $(5$ points$)2.$What other, perhaps nonquantifiable, factors affect Bens decision to get an MBA? $(5$ points$)3.$Assuming all salaries are paid at the end of each year, what is the best option for Ben from a strictlyfinancial standpoint? $(20$ points$)4.$What initial salary would Ben need to receive to make him indifferent between attending Mt$.$ PerryUniversity and staying in his current position? $(10$ points$)$