Victor hernandez Considers a Career Change Victor is somewhat satisfied with his sales career and has always wondered about a career as a teacher in a public school. He would have to take a year off work to go back to college to obtain his

Suppose that you are in the fall of your senior year and are faced with the choice of either getting a job when you graduate or going to law school. Of​ course, your choice is not purely financial. ​ However, to make an informed decision you would like to know the financial implications of the two alternatives. ​ Let's assume that your alternatives are as​ follows:   If you take the​ "get a​ job" route you expect to start off with a salary of ​$40,000 per year. There is no way to predict what will happen in the​ future, your best guess is that your salary will grow at 5 percent per year until you retire in 45 years. As a law​ student, you will be paying ​$25,000 per year tuition for each of the 3 years you are in graduate school. ​ However, you can then expect a job with a starting salary of ​$75,000 per year. ​ Moreover, you expect your salary to grow by 7 percent per year until you retire 39 years later.   ​Clearly, your total expected lifetime salary will be higher if you become a…

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Mark is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates costs to attend Texas Tech for 4 years including room and board are $20,000 per year. He also assumes tuition costs will rise by 3.5% per year. How much is a 4-year degree going to cost Mark?      $92,183.27      $84,298.86      $7,231,158.87      $1,314,002.83

Suppose you have just finished your third year of college and expect to graduate with a bachelor's degree in accounting after completing two more semesters of coursework. The salary for entry-level positions with an accounting degree is approximately $48,000 in your area. Shelton Industries has just offered you a position in its northwest regional office. The position has an annual salary of $40,000 and would not require you to complete your undergraduate degree. If you accept the position, you would have to move to Seattle. Required: For each of the following costs, choose 'Yes' to indicate if the cost or benefit is a relevant cost or benefit, irrelevant cost or benefit, sunk cost, or opportunity cost (can choose "Yes" in more than one column if applicable). (Select 'No' in the inappropriate cells.) $40,000 salary from Shelton Anticipated $48,000 salary with an accounting degree Tuition and books for years 1 to college Cost to relocate to Seattle Tuition and books for remaining two…

Use RIA Checkpoint to answer the following questions. 5. Frank and Farrah, who are twins, ask you to research an issue for them. Both are starting new jobs as staff accountants. Farrah decides to start saving $400 per month and intends to keep saving $400 per month for 20 years. Frank, on the other hand, desperately wants a new sports car and thus decides he is going to wait five years before starting his $400 per month savings plan. Frank figures $400 per month for five years is only a difference of $24,000 so it will not make much of a difference if he waits five years before starting to save. What difference will delaying his savings really make? Assuming a 6 percent rate of return, using the Savings tools in Checkpoint, what is the difference in the future value of Farrah’s and Frank’s savings plans? (Assume the starting amount = zero). a. $187,065. b. $89,574. c. $107,253. d. $66,935. e. None of the above.   6. Edward received two gifts in 2023. A car valued at $30,000 from his…

After graduation, you have been offered an engineering job with a large company that has offices in Tennessee and Pennsylvania. The salary is $55,000 per year at either location. Tennessee’s tax burden (state and local taxes) is 6% and Pennsylvania’s is 3.07%. If you accept the position in Pennsylvania and stay with the company for 10 years, what is the FW of the tax savings? Your personal MARR is 10% per year.

A high school graduate has to decide between working and going to college. If he works, he will work for the next 50 years of his life. If he goes to college, he will be in college for 5 years, and then work for 45 years. In this model, the rate of discount that equates the lifetime present value of not going to college and going to college is 8.24 percent when the cost of each year of college is $15,000, each year of noncollege work pays $35,000, and each year of postcollege work pays $60,000. For each of the parts below, discuss how the rate of discount that equalizes the two options would change and who would make a different schooling decision based on the change. (Extra credit: Use Excel to show that the rate of return to schooling is 8.24 percent in the above case and solve for the rates of discount associated with each of the parts below.) a. Each year of college still costs $15,000 and each year of postcollege work still pays $60,000, but each year of noncollege work now pays…

Suppose that you decide to go to summer school. Your tuition cost is $3,000, books and supplies cost $300, and room and board cost $1,000. You would not work while you attend summer school. If you did not go to summer school you would take a summer job which earns you $5,000 for the summer and your cost of room and board in the summer would be $2,000. Considering only this information, what is the dollar value of your total opportunity cost of attending summer school?

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