Mba Decision

The MBA Decision

In Chapter 4, the authors introduce two basic concepts, future value and present value (Ross, Westerfield, Jaffe & Jordan, 2011). According to Ross, Westerfield, Jaffe, and Jordan (2011), future value is the “value of a sum after investing over one or more periods” (p. 85). Present value, which is also referred to as the discount rate, determines the amount of money an individual needs to invest in order to have a pre-determined amount of money at some point in the future (Ross, Westerfield, Jaffe & Jordan, 2011).

In the closing case presented in this chapter, Ben Bates is evaluating obtaining an MBA degree, which he feels will allow him to accomplish his goal of becoming an investment banker. This paper will analyze this case by addressing the questions presented in Chapter 4.

Effect of Age on MBA Decision

Age is an important factor in Ben’s decision. There is an assumption that the younger an individual is, the greater length of time there is for an increased salary to offset the cost of obtaining an MBA degree. The schools Mr. Bates has evaluated do not allow students to work while enrolled in its MBA program; therefore, the total cost not only includes the explicit costs of tuition, but also the opportunity cost of his forgone salary.

Non-Quantifiable Factors

While quantifiable factors are essential in this decision, non-quantifiable factors are equally important. For example, I waited 18 years before going back to school for my MBA. This degree is not required for my current role as an IT Director; however, if I want to further advance my career, most Vice-President level positions require an MBA degree. I am married, but I do not have children. While my husband does not enjoy evenings or weekends when my laptop does not leave my side, he understands this will help me in the future to advance my career. Similarly, in Ben Bates’ scenario, some important non-quantifiable factors would be his marital status and whether he has any...