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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Maria Turner just graduated from college with a degree in accounting. She planned to enroll immediately in the master's program at
her university but has been offered a lucrative job at a well-known company. The job is exactly what Maria hoped to find after
obtaining her graduate degree.
In anticipation of master's program classes, Maria already spent $450 to apply for the program. Tuition is $8,000 per year, and the
program will take two years to complete. Maria's expected salary after completing the master's program is approximately $60,000. If
she pursues the master's degree, Maria would stay in her current home that is near the campus and costs $600 per month in rent. She
also would remain at her current job that pays $25,000 per year. Additionally, Maria's immediate family is nearby. She spends
considerable time with family and friends, especially during the holidays. This would not be possible if she accepts the job offer
because of the distance from her new location.
The job Maria has been offered includes a salary of $50,000. She would have to relocate to another state, but her employer would pay
$5,000 for moving expenses. Maria's rent in the new location would be approximately $800 per month. The new location is a fast-
growing, active city that offers a number of cultural activities that Maria would enjoy. The city is also home to Maria's favorite Major
League Baseball team, and she would expect to buy season tickets.
Required:
1. Help Maria make her decision by categorizing the factors involved in making her choice. Complete the following chart regarding the
factors in Maria's decision. A single factor may have multiple columns checked.
2. For each of the following items, identify the differential amount in Maria's alternatives. For example, the incremental cost of tuition is
$16,000 if Maria chooses to pursue the master's degree.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Help Maria make her decision by categorizing the factors involved in making her choice. Complete the following chart
regarding the factors in Maria's decision. A single factor may have multiple columns checked.
Note: Leave the cell blank if the factor doesn't fall in a particular column.
Factor
$450 spent on application fee
$8,000 per year tuition
$60,000 salary with master's degree
$600 per month current rent
$25,000 current salary
Time spent with family and friends
$50,000 new salary
$5,000 moving expenses
$800 rent per month in new location
Cultural activities in the new location
Ability to have MLB season tickets
Relevant Irrelevant Sunk Cost Qualitative
< Required 1
Required 2 >
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