After Earning Your BA, You Have to Decide Whether to Accept

question 148

Essay

After earning your BA, you have to decide whether to accept the offer of a job that will pay you
$45,000 per year or spend an additional two years earning an MBA.If you decide to pursue the graduate degree, your annual expenses for tuition, books, board, and lodging will be $32,000.You have been offered a scholarship for $10,000 per year, but in order to pay the remaining $22,000 per year, you would have to cash in savings bonds that your grandparents have given you that have been earning $500 in interest per year.The annual opportunity cost of earning your MBA is:
A.$67,500.
B.$77,000.
C.$99,000.
D.$77,500.

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Definitions:

Financial Calculators

Electronic tools or software used to perform financial operations and calculations, including loan payments, investment returns, and more.

Interest Rate

The tariff a borrower pays to a lender, calculated as a proportion of the principal, for the right to employ certain assets.

Present Value

Calculated by discounting future cash flows to understand their worth in today's terms, taking into account the time value of money.

Simple Interest

Interest calculated on the principal amount only, not on accrued interest from previous periods.