SOLVE THIS QUESTION. SHOW WORK FOR QUESTIONS $3$ & $5.$

The MBA Decision

Ben Bates graduated from college six years ago with a finance undergraduate

degree. Although he is satisfied with his current job, his goal is to become an

investment banker. He feels that an MBA degree would allow him to achieve this

goal. After examining schools, he has narrowed his choice to either Wilton

University or Mount Perry College. Although internships are encouraged by both

schools, to get class credit for the internship, no salary can be paid. Other than

internships, neither school will allow its students to work while enrolled in its MBA

program.

Ben currently works at the money management firm of Dewey and Louis. His

annual salary at the firm is $$69,000$ per year, and his salary is expected to increase

at $3$ percent per year until retirement. He is currently $28$ years old and expects to

work for $40$ more years. His current job includes a fully paid health insurance plan,

and his current average tax rate is $26$ percent. Ben has a savings account with

enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA

programs in the country. The MBA degree requires two years of full$-$time

enrollment at the university. The annual tuition is $$75,000,$ payable at the

beginning of each school year. Books and other supplies are estimated to cost

$$3,600$ per year. Ben expects that after graduation from Wilton, he will receive a

job offer for about $$115,000$ per year, with a $$20,000$ signing bonus. The salary at

this job will increase at $4$ percent per year. Because of the higher salary, his average

income tax rate will increase to $31$ percent.

The Bradley School of Business at Mount Perry College began its MBA program

The Bradley School of Business at Mount Perry College began its MBA program

$16$ years ago. The Bradley School is smaller and less well known than the Ritter

College. Bradley offers an accelerated, one$-$year program, with a tuition cost of

$$90,000$ to be paid upon matriculation. Books and other supplies for the program

are expected to cost $$5,400.$ Ben thinks that he will receive an offer of $$96,000$ per

year upon graduation, with an $$18,000$ signing bonus. The salary at this job will

increase at $3\mathrm{.}5$ percent per year. His average tax rate at this level of income will be

$29$ percent.

Both schools offer a health insurance plan that will cost $$3,500$ per year, payable at

the beginning of the year. Ben also estimates that room and board expenses will

cost $$2,500$ more per year at both schools than his current expenses, payable at the

beginning of each year. The appropriate discount rate is $4\mathrm{.}7$ percent.

How does Ben's age affect his decision to get an MBA?

What other, perhaps nonquantifiable, factors affect Ben's decision to get an

MBA?

Assuming all salaries are paid at the end of each year, what is the best option

for Ben$-$from a strictly financial standpoint?

$4$ Ren helieves that the annronriate analv

The MBA Decision

Ben Bates graduated from college six years ago with a finance undergraduate degree.

Although he is satisfied with his current job, his goal is to become an investment banker.

He feels that an MBA degree would allow him to achieve this goal. After examining

schools, he has narrowed his choice to either Wilton University or Mount Perry College.

Although internships are encouraged by both schools, to get class credit for the

internship, no salary can be paid. Other than internships, neither school will allow its

students to work while enrolled in its MBA program.

Ben currently works at the money management firm of Dewey and Louis. His annual

salary at the firm is $$69,000$ per year, and his salary is expected to increase at $3$

percent per year until retirement. He is currently $28$ years old and expects to work for $40$

more years. His current job includes a fully paid health insurance plan, and his current

average tax rate is $26$ percent. Ben has a savings account with enough money to cover

the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA programs in

the country. The MBA degree requires two years of full$-$time enrollment at the university.

The annual tufion is $$75,000,$ payable at the beginning of each school year. Books and

other supplies are estimated to cost $$3,600$ per year. Ben expects that after graduation

from Wilton, he will receive a job offer for about $$115,000$sis is to calculate the future value of eachSteps for ANSWER QUESTIONS $1-6$ AND SHOW WORK FOR QUESTIONS $3$ & $5$ PLEASE.