Today is 2022. Tiffany is 30 years old. She is currently employed and earns $50,000 a year that she anticipates will grow at 3% per year. She hopes to retire at age 65 and has just begun to think about the future. Tiffany has $90,000 that she recently inherited from her aunt. She has purchased 30-year Treasury Bonds with the inheritance money and her default plan is to keep this money invested in 30-year Treasury Bonds. Alternatively, she is considering whether she should further her education and would use part of her inheritance to pay for it. She has looked into a couple of options and is asking for your help as a financial planning intern to determine the financial consequences associated with each option. She has already been accepted to both of these programs and could start either one soon. One alternative that Tiffany is considering is obtaining a certification in management. This certification would automatically promote her to an associate in her company. The base salary for a sales associate is $12,000 more than what she currently earns, and she anticipates that this salary differential will grow at a rate of 3% a year as long as she keeps working. The certification program requires the completion of 20 web-based courses and a score of 80% or better. She has learned that the average amount of time necessary to finish the program is one year. The total cost of the program is $6,000, due when she enrolls in the program. Tiffany does not expect to lose any income during the certification. Another option is going back to school for an MBA degree. With an MBA degree, Tiffany expects to be promoted to a managerial position in her current firm. The managerial position pays $30,000 a year more than her current position. She expects that this salary differential will grow at a rate of 4% per year for as long as she keeps working. The evening program, which will take three years to complete, costs $30,000 per year, due at the beginning of each of her three years in school. Since she will attend classes in the evening, Tiffany doesn't expect to lose any income while she is earning her MBA if she chooses to undertake the MBA. 1. On Excel, make a timeline for her current situation, as well as the certification program and MBA degree options, using the following assumptions:

Tiffany's interest rate is 2.4% Salaries for the year are paid only once, at the end of the year. So that means she will receive her current salary of $50,000 in a year from today. The salary increase becomes effective immediately upon graduating from the MBA program or being certified. That is, because the increases become effective immediately, but salaries are paid at the end of the year, the first salary increase will be paid exactly one year after graduation or certification. For example, should she pursue the certification program, her salary will increase by $12,000 upon graduation in a year from today, but the payment of that increased salary will not occur until 2 years from today. The $30,000 salary differential that she will get upon graduating from the MBA program will be on top of the salary that she would be receiving in 3 years from now in her current position, not on top of her current salary of $50,000 as of 2022. Moreover, this salary differential will be paid 1 year after she starts working in the managerial position upon graduation, i.e., 4 years from today. 3. Calculate the present value of the salary differential for completing the certification program. Subtract the cost of the program to get the NPV of undertaking the certification program. 4. Calculate the present value of the salary differential for completing the MBA degree. Calculate the present value of the cost of the MBA program. Based on your calculations, determine the NPV of undertaking the MBA. 5. Based on your answers to Questions 3 and 4, what advice would you give to Tiffany? If she can only pursue one program, which one would you recommend as a financial decision?