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Mini case ben bates the mba decision

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Although he is satisfied with his current job, his goal is to become an investment banker He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College.

Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program.

  • He is currently 28 years old and expects to work for 40 more years;
  • The salary at this job will increase at 4 percent per year;
  • The current borrowing rate is 5;
  • After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College;
  • His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent;
  • Ben currently works at the money management firm of Dewey and Louis.

Ben currently works at the money management firm of Dewey and Louis. His annual sal- ary at the firm is S65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent.

Mini case 4 the mba decision answer ben bates

Ben has a savings account with enough money to cover the entire cost of his MBA program. The MBA degree requires two years of full-time enrollment at the univer- sity. Books and other supplies are estimated to cost S3,000 per year. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate wll increase to 31 percent. The Bradley School is smaller and less well known than the Ritter College.

Books and other supplies for the program are expected to cost S4,500. The salary at this job will increase at 3.

His average tax rate at this level of income will be 29 percent.

The appropriate discount rate is 6. How does Ben's age affect his decision to get an MBA?

  • Books and other supplies are estimated to cost S3,000 per year;
  • The salary at this job will increase at 4 percent per year;
  • Suppose, instead of being able to pay cash for his MBA.

What other, perhaps nonquantifiable factors affect Ben's decision to get an MBA? Assuming all salaries are paid at the end of each year, what is the best option for Ben- from a strictly financial standpoint? How would you evaluate this statement?

The current borrowing rate is 5. How would this affect his decision? Ben believes that the appropriate analysis is to calculate the future value of each option 5.

What initial salary would Ben need to receive to make him indifferent between attend- 6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money.

Age is a major factor affecting Ben's decision since more time he invests in an MBA course less working years will be available for him in future and at the same time if he starts the course late in his career increment will occur late.

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