The Authors Cite a Recent Study of MBA Programs That

question 12

Multiple Choice

The authors cite a recent study of MBA programs that compares pre-MBA salaries with post-MBA salaries. For some of the highest ranked schools, the salary difference was roughly $100,000 per year, and the difference was roughly $60,000 for some schools ranked near the bottom of the top 20. Is it possible that the financial returns from an MBA earned at a lower ranked school may actually exceed the returns from a top ranked school?

• A) Yes, the lower ranked schools may provide a higher net present value for the degree if their tuition is low enough.
• B) Yes, but the potential gains depend on the discount rate and not the tuition.
• C) No, the salary advantages of the top ranked schools always payoff in the long run.
• D) We do not have enough information to answer the question.

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Definitions:

Activity Ratios

Financial ratios that measure the speed with which various asset accounts are converted into sales or cash.

Asset Usage

Refers to how effectively a business utilizes its resources, including physical assets, to generate revenue or achieve its objectives.

Sales

Represent the transactions involving the exchange of goods or services for money, which are pivotal to the revenue generation of a company.

Balance Sheet

A financial statement that presents a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.