Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for...
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Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for two years while living expenses will be $25,000 per year. She has S10,000 in savings, which she can spend on her education, and will need to borrow the rest from her bank. Her annual loan repayment will be $10,500. She currently works as an analyst and makes $60,000 a year; after she gets her degree she hopes to work as a manager for S150,000 a year. Refer to the six-step procedure provided in Figure 1.1 (Textbook page 24) to answer these questions: (a) How should your friend formulate her problem? (b) What are her projected costs? (Identify all costs) (c) Suggest alternatives to your friend to reduce the uncertainty associated with finding a high- income job to pay off her loan (d) Select a criterion for discriminating among alternatives, and use it to advise your friend on which course of action to pursue. (e) Attempt to analyze and compare the alternatives in view of at least one criterion in addition to cost. (f) What should your friend do base on the information you and she have generated? Step 1 Step 2 Step 3 oli •Collect all the relevant information Define the goals and objectives • Want mechanical security and lower cost •Recognize a decision problem •Need a car •Gather technical and financial data Step 4 Step 5 Step 6 •Select the decision Select the best alternative Identify a set of feasible decision alternatives criterion to use •Select Honda • Want minimum total cash 1105 M. •Choose between Focus and Honda outlay and driving flexibility new bno ng Figure 1.1 Logical steps to follow in a car-leasing decision0a ahi Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for two years while living expenses will be $25,000 per year. She has S10,000 in savings, which she can spend on her education, and will need to borrow the rest from her bank. Her annual loan repayment will be $10,500. She currently works as an analyst and makes $60,000 a year; after she gets her degree she hopes to work as a manager for S150,000 a year. Refer to the six-step procedure provided in Figure 1.1 (Textbook page 24) to answer these questions: (a) How should your friend formulate her problem? (b) What are her projected costs? (Identify all costs) (c) Suggest alternatives to your friend to reduce the uncertainty associated with finding a high- income job to pay off her loan (d) Select a criterion for discriminating among alternatives, and use it to advise your friend on which course of action to pursue. (e) Attempt to analyze and compare the alternatives in view of at least one criterion in addition to cost. (f) What should your friend do base on the information you and she have generated? Step 1 Step 2 Step 3 oli •Collect all the relevant information Define the goals and objectives • Want mechanical security and lower cost •Recognize a decision problem •Need a car •Gather technical and financial data Step 4 Step 5 Step 6 •Select the decision Select the best alternative Identify a set of feasible decision alternatives criterion to use •Select Honda • Want minimum total cash 1105 M. •Choose between Focus and Honda outlay and driving flexibility new bno ng Figure 1.1 Logical steps to follow in a car-leasing decision0a ahi
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