Prof. Wajeeh Elali
2nd Semester 2015
Case # 1
Time Value of Money(*)
Assume today is February 1, 2015. Natasha Kingery is 30 years old and has a Bachelor of Science degree in computer science she is currently employed as Tier 2 field services representative for a telephony corporation located in Seattle, Washington, and earns $38,000 a year that she anticipates will grow at 3% per year. Natasha hopes to retire at age 65 and has just begun to think about the future. Natasha has $75,000 that she recently inherited from her aunt. She invested this money in 10- year Treasury Bonds. She is considering whether she should further her education and would use her inheritance to pay for it.
She has investigated a couple of options and is asking for your help as a financial planning in tern to determine the financial consequences associated with each option. Natasha has already. Been accepted m both of these program and could start either one soon.
One alternative that Natasha is considering is attaining a certification in network design. This certification would automatically promote her to a Tier 3 field service representative in her company. The base salary for a Tier 3 representative is $. 10,000 more than what she currently earns end she anticipate that this salary differential will grow at a rate of 3% a year as long as she keeps working. The certification program requires the completion of 20 Web-based courses and a score of 80% or better on an exam at the end of the muse work. She has learned that the average amount of time necessary to finish the program is one year. The total cost of the program is $5000, due when she enrolls in the program. Because she will do all the work for the certification on her own time, Natasha does not except to lose any income during the certification.
Another option is going back to school for an MBA degree. With an MBA degree, Natasha expects to be promoted to a managerial position in her...
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