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16. Timothy is currently pursuing a financial planning degree with a 100% performance scholarship at Campbellsville University. After graduation, if he expects to earn the following (cash flows) estimated salary, what is his future earnings projection in today's dollars (net present value of his expected salary)? (Assume an inflation rate of 5.5% as of April 5th, 2023). 18. Time Cash Flow Timeline Cash Flow Year 1 $0 17. Timothy is contemplating returning to school to get an MBA (Master of Business Administration). He anticipates that it would take him two years to get his MBA, and the program would cost $10,600 per year in books and tuition (payable each year). After graduation, Timothy anticipates that he will be able to earn approximately $10,000 more per year with the MBA compared to having a Bachelor's degree. Based on the following cash flows, what is his future earnings in today's dollars with a Master's degree? (Assume an inflation rate of 5.5% as of April 5th, 2023). Year 1- 5 $50,000 Year 2 $0 Year 6- 10 Year 11- Year 16- Year 21- 15 20 45 $55,000 $65,000 $75,000 $95,000 Year 3-5 $60,000 Year 6-10 $70,000 Year 11-15 $85,000 Year 16-20 $95,000 Year 21-45 $125,000 Based on the net present value of Timothy's future earnings calculations in 16 & 17, should he consider attending graduate school?

16. Timothy is currently pursuing a financial planning degree with a 100% performance scholarship at Campbellsville University. After graduation, if he expects to earn the following (cash flows) estimated salary, what is his future earnings projection in today's dollars (net present value of his expected salary)? (Assume an inflation rate of 5.5% as of April 5th, 2023). 18. Time Cash Flow Timeline Cash Flow Year 1 $0 17. Timothy is contemplating returning to school to get an MBA (Master of Business Administration). He anticipates that it would take him two years to get his MBA, and the program would cost $10,600 per year in books and tuition (payable each year). After graduation, Timothy anticipates that he will be able to earn approximately $10,000 more per year with the MBA compared to having a Bachelor's degree. Based on the following cash flows, what is his future earnings in today's dollars with a Master's degree? (Assume an inflation rate of 5.5% as of April 5th, 2023). Year 1- 5 $50,000 Year 2 $0 Year 6- 10 Year 11- Year 16- Year 21- 15 20 45 $55,000 $65,000 $75,000 $95,000 Year 3-5 $60,000 Year 6-10 $70,000 Year 11-15 $85,000 Year 16-20 $95,000 Year 21-45 $125,000 Based on the net present value of Timothy's future earnings calculations in 16 & 17, should he consider attending graduate school?

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 37P: Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time...
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Time Cash Flow 18. 16. Timothy is currently pursuing a financial planning degree with a 100% performance scholarship at Campbellsville University. After graduation, if he expects to earn the following (cash flows) estimated salary, what is his future earnings projection in today's dollars (net present value of his expected salary)? (Assume an inflation rate of 5.5% as of April 5th, 2023). Timeline Cash Flow Year 1 $0 Year 1- 5 Year 6- 10 $50,000 $55,000 17. Timothy is contemplating returning to school to get an MBA (Master of Business Administration). He anticipates that it would take him two years to get his MBA, and the program would cost $10,600 per year in books and tuition (payable each year). After graduation, Timothy anticipates that he will be able to earn approximately $10,000 more per year with the MBA compared to having a Bachelor's degree. Based on the following cash flows, what is his future earnings in today's dollars with a Master's degree? (Assume an inflation rate of 5.5% as of April 5th, 2023). Year 2 $0 Year 11- 15 20 $65,000 $75,000 Year 3-5 $60,000 Year 16- Year 21- 45 $95,000 Year 6-10 Year 11-15 Year 16-20. $70,000 $85,000 $95.000 Year 21-45 $125,000 Based on the net present value of Timothy's future earnings calculations in 16 & 17, should he consider attending graduate school?
Transcribed Image Text:Time Cash Flow 18. 16. Timothy is currently pursuing a financial planning degree with a 100% performance scholarship at Campbellsville University. After graduation, if he expects to earn the following (cash flows) estimated salary, what is his future earnings projection in today's dollars (net present value of his expected salary)? (Assume an inflation rate of 5.5% as of April 5th, 2023). Timeline Cash Flow Year 1 $0 Year 1- 5 Year 6- 10 $50,000 $55,000 17. Timothy is contemplating returning to school to get an MBA (Master of Business Administration). He anticipates that it would take him two years to get his MBA, and the program would cost $10,600 per year in books and tuition (payable each year). After graduation, Timothy anticipates that he will be able to earn approximately $10,000 more per year with the MBA compared to having a Bachelor's degree. Based on the following cash flows, what is his future earnings in today's dollars with a Master's degree? (Assume an inflation rate of 5.5% as of April 5th, 2023). Year 2 $0 Year 11- 15 20 $65,000 $75,000 Year 3-5 $60,000 Year 16- Year 21- 45 $95,000 Year 6-10 Year 11-15 Year 16-20. $70,000 $85,000 $95.000 Year 21-45 $125,000 Based on the net present value of Timothy's future earnings calculations in 16 & 17, should he consider attending graduate school?
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