Business

Case Study- The MBA Decision

Finance

1.) Ben’s age affect his decision to get an MBA in many ways. Ben is 28 years old and plans on work for another 38 years. In the grand scheme of things Ben is relatively young in terms of his career. He has a full career ahead of him and by pursuing an MBA degree and losing out on a few years of work, he will make up for lost time with an increase of salary. This would be an opportunity coast that he would have to absorb, but in the long run would greatly benefit from it.

2.) Ben will have many other influences that will affect his decision in getting an MBA degree. Getting an MBA degree is not always cut and dry and I’m sure Ben is going through the same thing. He will have to look at the job market and whether or not getting an MBA degree would benefit him when he finishes. Will the job market have a high demand for MBA degrees and if so, will the job you get be good enough to pay back student loans in a reasonable time. He also needs to consider his own personal life. Does he have a family, kids, or significant others? These are all things that play a huge role in the decision process of going back to school.

3.) Assuming that all salaries are paid at the end of the year, the best option for Ben from a strictly financial standpoint would be to quit his current job and go back to school. In order to determine this you take the present value of all future salary for the next 38 years, the cost of getting an MBA degree figure out the best of the three options listed.

4.) It is my opinion that Ben may be mistaken. In order to better understand future value you have to look at present value. By looking at only the future value of each of the three options he will overlook many costs. Future value is actually considered to be worth less be applied here.

5.) If Ben were to stay at his current position he would need nearly a twenty percent increase in order to offset his potential salary and make...