Yasmin Jamieson is 18 years old and is about to graduate from an Ottawa high school....

Yasmin Jamieson is 18 years old and is about to graduate from an Ottawa high school. She must decide: which university will she attend in September? She wants to follow a 4-year undergraduate degree in Economics. Yasmin has been accepted to attend McMaster University in Ontario, Canada, and Stanford University, California, United States. She faces only one annual cost for the each of the four years she is in university: tuition. Annual tuition at McMaster is $15,000. At Stanford, annual tuition is $45,000. Assume that she is not considering the option of working after high school. Therefore, do not consider the foregone labour earnings when going to university. After graduation, Yasmin has a strong interest in Labour Economics and hopes to receive job offers from Capital Economics (near Hamilton, Canada) and from Insight Economics (near Stanford, USA).

She knows that these two companies offer different annual salaries depending on where one has graduated. Capital Economics will offer a McMaster graduate an annual salary of $128,000 and a Stanford graduate an annual salary of $160,000. Insight Economics will offer a McMaster graduate an annual salary of $175,000 and a Stanford graduate an annual salary of $250,000.

Let’s assume the following:

• Yasmin’s objective in her decision-making is to maximize the present value of net future income over her career (that is, income net of costs).

• She is certain to get job offers from both companies.

• Please ignore differences between these two cities in terms of income taxes, the exchange rate, the cost of living and moving costs.

• These annual salaries do not change for the duration of her expected career, from age 22 to 65. Hint: this time horizon is sufficiently long to use the present value (PV) approximation formula.

• However, the present value of annual tuition costs should be calculated using the expanded present value formula.

• The market interest rate is 5%. Which university would you recommend to Yasmin? Please show all your calculations and explain your recommendation. (20 points)

Expert Solution

Rahul Sunny answered 7 months ago

It is believed that 1/4 of adults over 50 years old graduated from high school. We...

It is believed that 1/4 of adults over 50 years old graduated from high school. We want to see if the percentage is the same for 30 year olds. How many should we survey in order to estimate the proportion of non-grads within 0.06 with 90 % confidence? Suppose we have no idea of the % of non-grads, what would be the "n" value?

Based on data from a statistical abstract, only about 18% of senior citizens (65 years old...

Based on data from a statistical abstract, only about 18% of senior citizens (65 years old or older) get the flu each year. However, about 28% of the people under 65 years old get the flu each year. In the general population, there are 15% senior citizens (65 years old or older). (Round your answers to three decimal places.) (a) What is the probability that a person selected at random from the general population is senior citizen who will get...

An 18-year old high school teenager who did not know she was pregnant, gave birth to...

An 18-year old high school teenager who did not know she was pregnant, gave birth to an approximately 30-week old fetus. The baby was delivered at 35% less than the normal birth weight at 30-weeks with birth defects including medical abnormalities of the liver, spleen, and lungs. The skin of the baby presented with purplish splotchy appearance. Due to the abnormalities of the lungs and other organs the baby was placed in an incubator in an ICU unit, while the...

An 18-year old high school football player suffered a torn anterior cruciate ligament (ACL) in the...

An 18-year old high school football player suffered a torn anterior cruciate ligament (ACL) in the state playoffs. After undergoing repair, he found it difficult to ambulate with the knee brace. Weighing close to 140 kg (approximately 300 pounds), the athlete found it difficult to stand and balance on one leg. His mother was unable to support him by herself. After one week, the young man began to have increased pain and swelling in the calf of his affected leg....

Data collected from a local high school found that 18% of the students do not have...

Data collected from a local high school found that 18% of the students do not have internet access at home, which puts these students at a disadvantage academically. One teacher felt this estimate was too low and decided to test if the true percentage of students without home internet access was greater than the data suggested. To do this, she sampled 200 students. In her sample, 25% of the students did not have internet access at home. If the significance...

In a certain region, 20% of people over age 50 didn't graduate from high school. We...

In a certain region, 20% of people over age 50 didn't graduate from high school. We would like to know if this percentage is the same among the 25-30 year age group. Use critical values to exactly 3 decimal places. (a) How many 25-30 year old people should be surveyed in order to estimate the proportion of non-grads to within 7% with 95% confidence? (b) Suppose we wanted to cut the margin of error to 4%. How many people should...

In a certain region, 24% of people over age 50 didn't graduate from high school. We...

In a certain region, 24% of people over age 50 didn't graduate from high school. We would like to know if this percentage is the same among the 25-30 year age group. Use critical values to exactly 3 decimal places. (a) How many 25-30 year old people should be surveyed in order to estimate the proportion of non-grads to within 6% with 99% confidence? (b) Suppose we wanted to cut the margin of error to 2%. How many people should...

1. For tax year 2017. Marty is 17 years old, in high school, and is claimed...

1. For tax year 2017. Marty is 17 years old, in high school, and is claimed as a depended by his parents. He earned $950 in 2017 at a summer job; he has no other income. a. Will Marty’s employer send Him a W2 for this small amount? b. If Marty files a tax return what will be the amount of his standard deduction? c. What will be his personal exemption amount on his tax return? d. Under what conditions...

At a local high school 80% of students who enter as freshmen go on to graduate....

At a local high school 80% of students who enter as freshmen go on to graduate. 20 freshmen are randomly selected. a. What is the probability that at most 12 students will go on to graduate? Round your answer to 4 decimal places. b. What is the probability that at at least 15 students will go on to graduate? Round your answer to 4 decimal places. c. What is the probability that at least 12 and no more than 16...

an 18-year-old male high school student who had a 4-year history of diabetes mellitus was brought...

an 18-year-old male high school student who had a 4-year history of diabetes mellitus was brought ... Question: An 18-year-old male high school student who had a 4-year history of diabetes mellitus was brought... An 18-year-old male high school student who had a 4-year history of diabetes mellitus was brought to the emergency department because of excessive drowsiness, vomiting, and diarrhea. His diabetes had been well controlled with 40 units of NPH insulin daily until several days ago when he...

Question