As a recent graduate with an associate degree in Business, you are trying to determine if getting a Bachelor’s degree is worth the money. To help make the decision, you should evaluate the present value of the cash flows from possessing an associate degree versus possessing a bachelor’s degree. Researching current tuition fees and employment data has yielded the following information: * Annual Tuition and costs for a CSU: $10,000 (Assume this covers all expenses: tuition, books, etc.) * Time to Compete: 2 years * Average Salary with associate degree only: $35,000 * Average Salary with bachelor’s degree: $55,000 * Present Value of 10% Discount Rate Assume you will earn the above salaries for ten years. Use the present value tables to complete the following: 1. Determine the Net Present Value of the Cash Flows from the associate degree; there is no tuition cost as you have already completed the degree. 2. Determine the Net Present Value of the Cash Flows from the bachelor’s degree; remember to account for the “cost” of tuition. 3. What is the advantage or disadvantage for pursuing a bachelor’s degree under these assumptions?
As a recent graduate with an associate degree in Business, you are trying to determine if getting a Bachelor’s degree is worth the money. To help make the decision, you should evaluate the present value of the
* Annual Tuition and costs for a CSU: $10,000 (Assume this covers all expenses: tuition, books, etc.)
* Time to Compete: 2 years
* Average Salary with associate degree only: $35,000
* Average Salary with bachelor’s degree: $55,000
* Present Value of 10% Discount Rate
Assume you will earn the above salaries for ten years. Use the present value tables to complete the following:
1. Determine the
2. Determine the Net Present Value of the Cash Flows from the bachelor’s degree; remember to account for the “cost” of tuition.
3. What is the advantage or disadvantage for pursuing a bachelor’s degree under these assumptions?
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