You have a job in a company that pays you P350,000 per year. For a better future, you want to get a Master's degree that could cost P100,000 but cannot continue your job while studying. If you decide to give up your job and return to school to earn a Master's degree
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You have a job in a company that pays you P350,000 per year. For a better future, you want to get a Master's degree that could cost P100,000 but cannot continue your job while studying. If you decide to give up your job and return to school to earn a Master's degree, how much would be your opportunity cost?
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- Suppose that, at age 30, you might wish to leave your job and pursue a master’s degree. If you choose to remain at your job, your employer would pay you $74k per year until retirement, at age 55. If you go back to the university, you would have to sacrifice 2 years of income, but once you graduate, you would receive $117k per year until you retire at age 55. The master’s program you are interested in costs $22k per year. Note: The term “k” is used to represent thousands (× $1,000). Required: At an opportunity cost of 8%, determine the percentage difference between your most and least profitable alternatives, with the least profitable option as the basis for your calculation.Answer% Intermediate calculations must be rounded to 3 decimal places (at least). Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).Allison is contemplating a job offer with an advertising agency where she will make $54 000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $38 000. If Allison decides to work with her father, the opportunity cost would be?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 $51,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year after taxes (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $21,000 per year (after taxes) over a business career of 39 years. Jenny believes that her opportunity cost of capital is 5.3%. Given herestimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The net present value (NPV) of entering this MBA program is Are the benefits of further education worth the associated costs?
- Elon works for a consultancy and currently has a wage of 500,000 kronor per year. He considers two options for the future, either switch to a new job at a bank that offers 600,000 kronor per year or to start a company that produces a new product that he calls Hyperloops. If he starts the company he would invest all his savings of 1 million kronor on this which would have an alternative return of 80,000 kronor per year. He expects to hire services from technical consultants for 100,000 kronor per year. Production would take place in an old factory that he would rent for 100,000 kronor per year. What is the accounting cost of running Hyperloop one year? What is the economic cost? Which one is the relevant in deciding whether to start Hyperloop or not?You give up a full-time salary of $45,000 a year to go to school for 2 years. The total cost of going to school is $30,000. If you want to be able to recover your investment in 5 years or less, what is the minimum salary you would need to earn upon earning your degree? a $51.000 b. $60.000 C $69,000 d $75.000In the upcoming year, the income from your current job will be $50,000. There is a 0.5 chance that you will keep your job and earn this income, and 0.2 chance that you will get a rise and earn 75,000. However, there is 0.3 chance that you will be laid off, putting you out of work for a time and forcing you to accept a lower paying job. In this case, your income is $25.000. The expected value of your income is thus $47,500.a) If your utility function has the formula 500I - 0.0002I2, determine the risk premium associated with this lottery.b) Provide an interpretation of the risk premium in this particular example.
- Suppose your expenses for this term are as follows: tuition: $12,000, room and board: $6,500, books and other educational supplies: $1,500. Further, during the term, you can only work part-time and earn $3,500 instead of your full-time salary of $14,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? $13,500 $20,000 $24,000 $30,500You currently pay $10,000 per year in rent to a landlord for a $100,000 house, which you are considering purchasing. You can qualify for a loan of $80,000 at 9% if you put $20,000 down on the house. To raise money for the down payment, you would have to liquidate stock earning a 15% return. Neglect other concerns, like closing costs, capital gains, and tax consequences of owning, and determine whether it is better to rent or own.You currently pay $10,000 per year in rent to a landlord for a $100,000 house, which you are considering purchasing. You can qualify for a loan of $80,000 at 9% if you put $20,000 down on the house. To raise money for the down payment, you would have to liquidate stock earning a 15% return. Neglect other concerns, like closing costs, capital gains, and tax consequences of owning, and determine whether it is better to rent or own and explain why.
- Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for two years while living expenses will be $25,000 per year. She has $10,000 in savings, which she can spend on her education, and will need to borrow the rest from her bank. Her annual loan repayment will be $10,500. she currently works as an analyst and makes $60,000 a year; after she gets her degree she hopes to work as a manager for $150,000 a year. How should your friend formulate her problem? What are her all projected costs ? Suggest alternatives to your friend to reduce the uncertainty associated with finding a high-income job to pay off her loan Select a criterion for discriminating among alternatives, and use it to advise your friend on which course of action to pursue Attempt to analyze and compare the alternatives in view of at least one criterion in addition to cost What should your friend do based on the information you and she have generated?Your son has come to you for advice. He is about to enter college and has two options open to him. His first option is to study pharmacy. If he does this, his pharmacy study would cost him $30,000 a year for sevenyears. Having obtained this, he would work for two years to save money for graduate school: in the first year he would earn $40,000, in the second year he would earn $50,000. He would then go to geta MBA, which will cost $45,000 a year for two years. After that he will be fully qualified and can earn $100,000 per year for 30 years.His other alternative is to study accounting. If he does this, he would pay $35,000 a year for four years and then he would earn $50,000 per year for 37years. The effort involved in the two careers is the same, so he isonly interested in the earnings the jobs. provide. All earnings and costs are paid at the end of the year. What advice would you give him,if the market interest rate is 6percent?Your son has come to you for advice. He is about to enter college and has two options open to him. His first option is to study pharmacy. If he does this, his pharmacy study would cost him $30,000 a year for sevenyears. Having obtained this, he would work for two years to save money for graduate school: in the first year he would earn $40,000, in the second year he would earn $50,000. He would then go to geta MBA, which will cost $45,000 a year for two years. After that he will be fully qualified and can earn $100,000 per year for 30 years.His other alternative is to study accounting. If he does this, he would pay $35,000 a year for four years and then he would earn $50,000 per year for 37years. The effort involved in the two careers is the same, so he isonly interested in the earnings the jobs. provide. All earnings and costs are paid at the end of the year. What advice would you give him,if the market interest rate is 6percent? (Note: This question is worth more)a.Tell him to choose…