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Long-term investment decision, NPV method Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and needed books for a master's program will have an upfront cost of $53,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $23,000 per year over a business career of 37 years. Jenny believes that her opportunity cost of capital is 6.4%. Given her estimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The following time line depicts the cash flows associated with this problem: 1 Tuition (CFO) Extra earnings 0 - $103,000 2 $23,000 $23,000 ... The net present value (NPV) of entering this MBA program is $ nearest dollar.) ... 37 $23,000 (Round to the

Long-term investment decision, NPV method Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and needed books for a master's program will have an upfront cost of $53,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $23,000 per year over a business career of 37 years. Jenny believes that her opportunity cost of capital is 6.4%. Given her estimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The following time line depicts the cash flows associated with this problem: 1 Tuition (CFO) Extra earnings 0 - $103,000 2 $23,000 $23,000 ... The net present value (NPV) of entering this MBA program is $ nearest dollar.) ... 37 $23,000 (Round to the

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Long-term investment decision, NPV method Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and needed books for a master's program will have an upfront cost of $53,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $23,000 per year over a business career of 37 years. Jenny believes that her opportunity cost of capital is 6.4%. Given her estimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The following time line depicts the cash flows associated with this problem: Tuition (CFO) Extra earnings 0 - $103,000 1 2 $23,000 $23,000 ... The net present value (NPV) of entering this MBA program is $ nearest dollar.) ... 37 $23,000 (Round to the
Transcribed Image Text:Long-term investment decision, NPV method Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and needed books for a master's program will have an upfront cost of $53,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $23,000 per year over a business career of 37 years. Jenny believes that her opportunity cost of capital is 6.4%. Given her estimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The following time line depicts the cash flows associated with this problem: Tuition (CFO) Extra earnings 0 - $103,000 1 2 $23,000 $23,000 ... The net present value (NPV) of entering this MBA program is $ nearest dollar.) ... 37 $23,000 (Round to the
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