PRACTICAL CASE BASED ON TIME VALUE CONCEPTS

   Deciding Affairs for added studies Jack Gates accelerating from academy 6 years ago with a undergraduate amount in accounts stream. Although he is annoyed with his accepted job, his aim is to become an advance banker. He feels that Master of business administering amount would acquiesce him to attain his target. Afterwards analytical business schools, he has shortlisted  his best to either York University or Xavier College. Although internships are encouraged by both schools, to get chic acclaim for the internship, no bacon can be paid. Alternative than internships, neither of schools shall acquiesce its acceptance to assignment while enrolled in its MBA program. Jack is currently accomplishing job at the accounting close of D&L. The anniversary amalgamation he gets at the close is $53,000 per year, and his bacon is accepted to abound at three percent per year until retirement. He is 28 years old and is accepted to assignment for 38 added years. His accepted job includes adapted affairs like bloom allowance plan, and his accepted boilerplate tax amount is 26 percent. Jack additionally has a accumulation anniversary with abundant money accoutrement the absolute amount of his master’s program. The Mount Academy of Business at York University is one of the best MBA programs in the country. This Masters amount requires two years of full-time acceptance at the university. The anniversary charge is $58,000, payable at the alpha of anniversary academy year. Books and alternative food are estimated to amount $2,000 per year. Jack thinks that afterwards graduation from York, he will get a job action for about $87,000 per year, with a $10,000 signing bonus. The bacon at this job will access at 4 percent per year. Because of the college salary, his boilerplate assets tax amount will access to 31 percent. The Segal Academy of Business at Xavier Academy began its MASTERS affairs 16 years ago. The Segal Academy is abate and beneath able-bodied accepted than the Mount College. Segal offers an accelerated one-year program, with a charge amount of $75,000 to be paid aloft matriculation. Books and alternative food for the affairs are accepted to amount $4,200. Jack expects that he will accept an action of $78,000 per year aloft graduation, with an $8,000 signing bonus. The bacon at this job shall access at 3.5 percent per year. His boilerplate tax amount at this akin of assets will be 29 percent. Both business schools action a bloom allowance plan that will amount $3,000 yearly, payable at the alpha of the year. Jack has additionally begin that both schools action alum housing. His allowance and lath costs will abatement by $4,000 per year at either academy he attends. The adapted abatement amount is 5.5 percent. QUESTIONS 1. Does Jack's age affect his accommodation for added studies? How? 2. What alternative factors(nonquantifiable) affect Jack's accommodation to get enrolled in added studies? 3. Assume all salaries are paid at the end of anniversary year, what is the best advantage for Jack from a banking point? 4. Jack believes that the adapted assay is to account the approaching amount of anniversary option. Do you anticipate it is wight way? How would you appraise this statement? 5. What antecedent bacon would Jack charge to accept to accomplish him aloof amid accessory York University and blockage in his accepted position? 6. Suppose, instead of actuality able to pay banknote for his degree, Jack charge borrow the money. Assume accepted borrowing amount is 5.4 percent. How would this affect his decision?

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