You have been accepted to an MBA program in both MIT and Harvard Business

School and now is time to decide which school will fit you best.

In order to emotionally detach yourself from the name and reputation of these universities you have decided to take a very rational approach and evaluate your decision using the financial tools learned during your corporate finance lectures.

Assume and research all the data in terms of tuition your cost of living if you stay in New York, salary expectation etc.

1- Produce the Expected cash flows for the next 8 years after graduation estimating: (30

marks)

a. all the costs associated with tuition fees, living allowances and others that you

think you will incur during your first 2 years.

b. Estimated changes in your career after graduation (job turnover)

Please justify all your inputs and do not forget to consider the underlying assumptions

for your NOPAT, Taxes, Depreciation, Capex and Net Working Capital

2- Consider a Terminal value after the 10 forecasted years. Justify your choices.

3- Consider an appropriate discount rate for your project justifying all your inputs.

4- Produce a sensitivity analysis considering worst and best scenario