Jim is 30 today and is considering studying for an MBA. He just received an annual salary of $50,000 and expect it to grow by 3% per year. MBAs typically earn $60,000 upon graduation, with salaries growing by 4%. THe MBA program he is considering is a full-time, 2-year program that costs $20,000 per year, payable at the end of each study year. He wants to retire on his 65th birthday. The relevant discount rate is 8%

a) Is it worthwhile for him to quit his job to do an MBA (ignore income taxes)?

b) What is the rate of return of the MBA?

c) If he wants to have 15% for the internal rate of return for the MBA, what yearly growth rate (for MBA) would be required?

	(a) Without MBA	(b) With MBA
First salary
Yearly salary growth
Annual return

Age	(a) Without MBA	(b) With MBA	(b) - (a)
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
NPV			$2,758.23
IRR			9.12%

Please show the excel formulas