# 7-11 Case Study

Topics: Master of Business Administration, Tax rate, Citation Pages: 6 (1012 words) Published: January 22, 2013
Assignment #1 – MBA Choices in Finance

Assigned Class 2 – Due 11:55pm on Sunday Week 4
75 Points – two page paper

Both schools offer a health insurance plan that will cost \$3,000 per year, payable at the beginning of the year. David also estimates that room and board expenses will cost \$2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.5 percent.

1. How does David’s age affect his decision to get an MBA? Explain why? 2. What other, perhaps non- quantifiable factors affect David’s decision to get an MBA? Explain in detail.

3. Assuming all salaries are paid at the end of each year, what is the best option for David – from a strictly financial standpoint? Explain why in detail with calculations. 4. David believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement? So what is the future value of each option? 5. What initial salary would David need to receive to make him indifferent between attending Prentice University and staying in his current position?

Explain in detail with calculations.

Students will be graded on their ability to cite examples from the text or websites (except Wikipedia). Students are to follow the guidelines for two page papers (which means all papers will have three sections: Introduction, Analysis and Conclusion). Place the answers to the questions in the analysis (you can number them which would help the instructor grade it) and make certain you have all the details for the calculations so the instructor can follow your thoughts. All papers are to use APA standards and have at least three citations. You must upload your file to Blackboard under Week2 Assignments. Go to the Assignment,...