Michelle currently works as a manager of an electronics store earning an annual salary of $155000. She noticed an internal job opening for a regional manager that pays $310000 salary, but an MBA is required for consideration. The cost for a full-time MBA program in two years is $165000. 

What is her opportunity cost for attending graduate school full-time, without consideration for time value of money?

Answer rating: 100% (QA)

Opportunity cost is the value of the next best alternative that is forgone when making a decision In other words it represents the benefits or earnings that could have been achieved by choosing an alternative option In this case Michelle is considering attending graduate school fulltime which means she would have to leave her current job as a manager of an electronics store Currently Michelle earns an annual salary of 155000 as a manager However she noticed an internal job opening for a regional manager position that offers a higher salary of 310000 This regional manager position requires an MBA for consideration Therefore if Michelle decides to pursue the regional manager role she needs to obtain an MBA Attending a fulltime MBA program typically takes two years to complete During those two years Michelle would not be working as a manager or earning ... View the full answer