Faith and Hope Are 30 Year Old Identical Twins

question 8

Essay

Faith and Hope are 30 year old identical twins. The only difference between Faith and Hope is their credit score. Faith has a proven record of repaying debt. Faith can borrow money at 4.5%. Hope has often missed debt payments. Hope can borrow at 8.5%.
They are considering enrolling in an evening MBA program. They plan on completing the program in two years. Assume the annual tuition is $16,000 for both years. They also anticipate that the non-monetary costs of obtaining an MBA will be $40,000 per year. The twins anticipate that after graduation in two years, their earnings will be $10,000 per year higher until they retire at age 62. Should Faith enroll in the evening MBA program? Should Hope enroll in the evening MBA program?

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Definitions:

Tax

A necessary financial obligation or other form of tax exacted from a taxpayer by a state institution with the aim of covering government expenses and various public financial needs.

Higher Prices

An increase in the cost of goods or services.

Tax

A compulsory monetary fee or different form of levy required from a taxpayer by a governmental body, used to finance government operations and various public costs.

Sellers

Entities or individuals that provide goods or services in exchange for payment, crucial to the operation of any market.