Your brother has come to you for advice. He is about to enter UTAR and has two

options open to him. His first option is to study engineering. If he does this, his

undergraduate degree would cost him RM11,500 a year for four years. After

graduated, he would need to gain two years of practical experience before he can

practice as a professional engineer. He is expected to earn RM34,000 per year for

that two years. After that, he will be fully qualified and can earn RM42,000 per year

for 36 years.

His other alternative is to study business. If he does this, he would pay RM14,000 a

year for three years and then proceed to obtain his one-year master degree prior to

working. The master study will cost RM20,000 a year. After that, he would earn

RM38,000 per year for 38 years.

The effort involved in the two careers is the same, so he is only interested in the

earnings the jobs provide. All earnings and costs are paid at the end of the year. If

the opportunity cost is 5 percent, advise him which option to accept with detailed

workings shown.

(10 marks)