Questionnaire Pertaining to MBA and Finance

1. How does Ben’s age affect his decision to get an MBA? Ben is now 28 years old and he graduated from college six years ago when he’s age is 22 years old. if we Assuming that Ben already working for about 5 years since graduated from college, he would have enough money from salary saving in 5 years to do his MBA at 28 years age. If he starts the MBA program on 28 years old, he will spend two years for study and perhaps finish his MBA at 30 years old. At 30 years old, he will start working again for 40 more years after getting the MBA. With those reasons, age affects his decision for getting an MBA.

2. What other, perhaps no quantifiable factors affect Ben’s decision to get an MBA?
If Ben is married and he has children that will effect his dissition to get MBA. another thing is the willingness is a big cause can effect Ben's disstion if he has willingness to studying.

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben – from a strictly financial standpoint?

Getting the MBA at Wilton University
A. PV of salary for 38 years (40 – 2 years)
B. PV of signing bonus

A. PV of salary for 38 years
The factors to consider are: He will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 % per year. Because of the higher salary, his average income tax rate will increase to 31 %.
Salary = $110,000, tax rate = 31%, so, C = $75,900
R (discount rate) = 6, 5%
G (growth rate) = 4%
T (the number of period working) = 38
So the PV is = $ 1,804,927.68

B. PV of signing bonus
The factors to consider are:
Signing bonus = $ 20,000
R (discount rate) = 6, 5%
T (the number of period working) = 38
So the PV is = $ 279,584.20

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement
Getting the MBA at Wilton University
In this case, must compute 4 parts:
A. FV of salary