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 $10,000 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 $150,000 a year. Refer to the seven-step procedure 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
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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 $10,000 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 $150,000 a year. How should your friend formulate her problem? What are her all projected costs ? Suggest alternatives to your friend to reduce the uncertainty associated with finding a high-income job to pay off her loan Select a criterion for discriminating among alternatives, and use it to advise your friend on which course of action to pursue Attempt to analyze and compare the alternatives in view of at least one criterion in addition to cost What should your friend do based on the information you and she have generated?Michael and Ava want to know how much it will cost to put their daughter Lily through college. She will begin college in 13 years. Assume college costs $12,000 per year today. Lily will attend college for 4 years. College costs increase 4.0% each year. How much money do Michael and Ava need to have on hand on the day Lily BEGINS college, in order to fund her entire college degree? (Assume the money will earn 6% annual interest while it is in her college savings account). Lily will spend the entire amount available during her college years. Each year of college she will withdraw more than the prior year (the amount will increase by the college cost inflation rate). (amortize the balance in her account to zero at the end of the 4 college years...base calculations on a growing annuity withdrawal schedule). (amortize the balance in her account to zero at the end of the 4 college years). O $73,292.32 O $69,235.87 O $48,000.00 O $79,923.53You are graduating in two years and are thinking about your future. You know that you will want to buy a house five years after you graduate and that you will want to put down $50,000. As of right now, you have 8,000 in your savings account. You are also fairly certain that once you graduate, you can go work in the family business and earn $32,000 a year, with a 5 percent raise every year. You plan to live with your parents for the first two years after graduation, which will enable you to minimize your expenses and put away $10,000 each year. The next three years, you will have to live out on your own, as your younger sister will be graduating from college and has already announced her plan to move back in the family house. Thus, you will only be able to save 13 percent of your annual salary. Assume that you will be able to invest savings from your salary at 7.2 percent. At what interest rate you need to invest the current savings account balance at in order to achieve your goal? (If…
- Michelle is attending college and has a part-time job. Once she finishes college, Michelle would like to relocate to a metropolitan area. She wants to build her savings so that she will have a "nest egg" to start her off. Michelle works out her budget and decides she can afford to set aside $80 per month for savings. Her bank will pay her 4% per year, compounded monthly, on her savings account. What will be Michelle's balance in five years?You will be graduating in two years and are thinking about your future. You know that you will want to buy a house five years after you graduate and that you will want to put down a $60,000 down payment at that time. As of right now, you have $8,000 in your IRA account. You are fairly certain that once you graduate, you can work in the family business and earn $32,000 a year, with a 5 percent raise every year. You plan to live with your parents for the first two years after graduation, which will enable you to minimize your expenses and put away $10,000 each year from your salary. For the next three years, you will have to live on your own as your younger sister will be graduating from college and has already announced her plan to move back into the family house. Thus, you will be able to save only 13 percent of your annual salary. Assume that you will be able to invest savings from your salary at 7.2 percent. At what interest rate will you need to invest in the current…Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Assume that the interest rate is 8.5%. What is the net present value of the decision to invest in college? O $126,154 $11,508 $136,877 $12,487
- Amy currently has $500 in an account with an annual rate of return of 4.3%. She wants to have $3000 for a trip to Florida when she graduates in 2 years. How much will she have to save each month to afford her trip?Engineering economics Problem: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 $10,000 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 hopesto work as a manager for $150,000 a year. ANSWER ONLY LETTER D TO FRefer to the seven-step procedure 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 associatedwith finding a high-income job to pay off her loan (d) Select a criterion for discriminating among alternatives, and use it toadvise your friend on which course of action to pursue.(e) Attempt to analyze and compare the alternatives in view of at least…Your son has come to you for advice. He is about to enter college and has two options open to him. His first option is to study pharmacy. If he does this, his pharmacy study would cost him $30,000 a year for sevenyears. Having obtained this, he would work for two years to save money for graduate school: in the first year he would earn $40,000, in the second year he would earn $50,000. He would then go to geta MBA, which will cost $45,000 a year for two years. After that he will be fully qualified and can earn $100,000 per year for 30 years.His other alternative is to study accounting. If he does this, he would pay $35,000 a year for four years and then he would earn $50,000 per year for 37years. The effort involved in the two careers is the same, so he isonly interested in the earnings the jobs. provide. All earnings and costs are paid at the end of the year. What advice would you give him,if the market interest rate is 6percent?
- Your son has come to you for advice. He is about to enter college and has two options open to him. His first option is to study pharmacy. If he does this, his pharmacy study would cost him $30,000 a year for sevenyears. Having obtained this, he would work for two years to save money for graduate school: in the first year he would earn $40,000, in the second year he would earn $50,000. He would then go to geta MBA, which will cost $45,000 a year for two years. After that he will be fully qualified and can earn $100,000 per year for 30 years.His other alternative is to study accounting. If he does this, he would pay $35,000 a year for four years and then he would earn $50,000 per year for 37years. The effort involved in the two careers is the same, so he isonly interested in the earnings the jobs. provide. All earnings and costs are paid at the end of the year. What advice would you give him,if the market interest rate is 6percent? (Note: This question is worth more)a.Tell him to choose…Your parents start saving for your sister's college education. She will begin college at age 18 and will need $4,000 per year at the end of each of the next 4 years. They will make a deposit one year from today in an account which pays 6% compounded annually, and an identical deposit each year including the year she starts college. If a deposit of $1,987 will allow them to reach their goal, how old is your sister now?Bayan wants to buy a house in six years. She hopes to be able to put down OMR 25000 at that time. If the bank CD she wants to invest in will pay 7.5 percent annually, how much will she have to invest today