(LO 9-3) Evaluate the future cash flows for the dataset, To MBA or Not To MBA, in Excel.

(Dataset is available via Connect Additional Student Resources.) Calculate the net present value (NPV) for those individuals deciding to pursue an MBA, or to not pursue an MBA. To do so, evaluate the future cash flows from age 25 to 60 for the two different scenarios. (Hint: Don’t worry about the initial outlay since the investment is made over two years, just use the NPV function for all cash flows with no initial outlay). Evaluate all cash flows using a 6% cost of capital.

Required 1. Calculate the NPV for the cash flows associated with getting an MBA. (Hint: Use

=NPV(0.06,B6:B41))

2. Calculate the NPV for the cash flows associated with not getting an MBA. (Hint: Use

=NPV(0.06,F6:F41))

3. What can you conclude from this analysis?

4. The NPV analysis is a type of quantitative analysis. What non quantitative (or qualitative) factors should also be considered?