A Master’s of Accountancy degree at Central University costs $12,000 for an additional fifth year of education beyond the bachelor’s degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only the undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn an annual salary of $50,000 per year (assumed to be paid at the end of the year) for 10 years after graduation. Assume that the average student with a graduate Master’s of Accountancy degree is expected to earn an annual salary of $66,00 per year (assumed paid at the end of the year) for nine (9) years after graduation. Assume a minimum required rate of return of 10%:
Determine the net present value of cash flows from an undergraduate degree.
Determine the net present value of cash flows from a Master’s of Accountancy degree, assuming no salary is to be earned during the graduate year of schooling.
What is the net advantage or disadvantage of pursuing a graduate degree under these circumstances?
the paper should meet the following requirements: 1- Be 3 pages in length, not counting the required title and reference pages. 2- The paper should include an introduction, a body with at least three fully developed paragraphs, and a conclusion.
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