Joe decides to take a 1-year intensive course in data processing after high school graduation where...

Joe decides to take a 1-year intensive course in data processing after high school graduation where direct costs=$1,000. Forgone earnings in year 1 are $5,000 from a part-time job.

At the end of this year, Joe can work for a computer company and expects to have earnings of $18,000 at the beginning of the year after his education (discount 1 year from now), $18,500 in year 2 (discount 2 years from now) and $19,000 in year 3 (discount 3 years from now).

If he goes to work with just a high school degree, he will earn $15,500 in each of these three years (we will assume his part-time job becomes full-time).

Interest is 10%.

What are the total costs of going to school? These are paid upfront and don’t need to be discounted.

What is the PV of the benefits of going to school? The benefit is the extra money he earns from having the certificate. Calculate one PV stream only.

Should Joe get the certificate? Why or why not?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

It is claimed that Florida’s high-school graduation rate is 77.9%. You take a random sample of...

It is claimed that Florida’s high-school graduation rate is 77.9%. You take a random sample of 300 Florida high-school seniors and discover that 41 of them withdrew during the year. At α=0.05, is there enough evidence to reject the claim?

For this homework assignment, we present two ideal scenarios. Scenario #1: After graduation from high school,...

For this homework assignment, we present two ideal scenarios. Scenario #1: After graduation from high school, students begin jobs as construction workers and elementary school teachers. They expect their wages to remain relatively level throughout their careers. They marry five years after graduation from high school and raise large families with home schooling by the parents. Before marriage, both men and women work; once couples begin home schooling their children, one parent stays home, either the father or the mother....

Nick Leeson’s adolescence was spent at Watford, UK where he attended high school. After that, he...

Nick Leeson’s adolescence was spent at Watford, UK where he attended high school. After that, he began to work at Coutts & Company and then spent two years at Morgan Stanley, taking up a position as an operation assistant. The experience allowed him to become familiar with the financial markets. Leeson then joined Barings. Founded in 1762 by Johann Barings, the Barings Bank was part of England’s history and even the Queen of England was among its clients. Barings was...

Retaking the SAT: Many high school students take the SAT's twice; once in their Junior year...

Retaking the SAT: Many high school students take the SAT's twice; once in their Junior year and once in their Senior year. In a sample of 50 such students, the score on the second try was, on average, 28 points above the first try with a standard deviation of 13 points. Test the claim that retaking the SAT increases the score on average by more than 25 points. Test this claim at the 0.01 significance level. (a) The claim is...

Retaking the SAT (Raw Data, Software Required): Many high school students take the SAT's twice; once...

Retaking the SAT (Raw Data, Software Required): Many high school students take the SAT's twice; once in their Junior year and once in their Senior year. The Senior year scores (x) and associated Junior year scores (y) are given in the table below. This came from a random sample of 35 students. Use this data to test the claim that retaking the SAT increases the score on average by more than 27points. Test this claim at the 0.01 significance level....

A survey of MBA graduates of a business school obtained data on the first-year salary after...

A survey of MBA graduates of a business school obtained data on the first-year salary after graduation and years of work experience prior to obtaining their MBA. The data are given in excel. Q: Write out the assumptions of simple linear regression. Use the output to validate assumptions or indicate if an assumption is not met. Experience Salary 8 113.9 5 112.5 5 109 11 125.1 4 111.6 3 112.7 3 104.5 3 100.1 0 101.1 13 126.9 14 97.9...

A survey of MBA graduates of a business school obtained data on the first-year salary after...

A survey of MBA graduates of a business school obtained data on the first-year salary after graduation and years of work experience prior to obtaining their MBA. The data are given in excel. 1. Run the regression analysis (Include all options). Report the least squares regression line. Give the 95% confidence interval for the least squares estimate of the slope. Report the correlation coefficient. Interpret. Report the coefficient of determination. Interpret. and Use the ANOVA output and write out the hypothesis being...

Please answer all the questions 1. High School Graduates Who Take the SAT. The national average...

Please answer all the questions 1. High School Graduates Who Take the SAT. The national average for the percentage of high school graduates taking the SAT is 49%, but the state averages vary from a low of 4% to a high of 92%. A random sample of 300 graduating high school seniors was polled across a particular tristate area, and it was found that 195 of them had taken the SAT. Estimate the true proportion of high school graduates in...

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...

Data collected over a long period of time showed that 1 in 1000 high school students...

Data collected over a long period of time showed that 1 in 1000 high school students like mathematics. A random sample of 30,000 high school students was surveyed. Let X be the number of students in the sample who like mathematics a) What is the probability distribution of X? b) What distribution can be used to approximate the distribution of X? Explain. c) Find the approximate probability of observing a value of X equal to 40 or more? d) Find...

Subjects