Question

Assume that the alternative to attending college was to work right after high school. Find the average wage of someone with a high school diploma, but keep in mind that the opportunity costs include only the income you are losing, so if you currently work part-time then the opportunity costs = Income working full time – Income working part-time. Be sure to explicitly state your assumptions.

What is the Present Values of costs and benefits?

Answer 1

Working right after high school has been seen as a less promising career as it offers low wages as compared to the person receiving wages who started working after completing his graduation. Graduation or high schooling upgrades a person and his or her knowledge level and thus eventually makes them more skilled and more talented. It also teaches the student about life and makes him or her more efficient. This is the reason why graduates are offered more wages than a person who started working right after hugh school. The opportunity cost of working right after high school is the increase in income lost that the student will receive when he or she will work after graduating. Usually people who work part time get around 8-10 dollars per hour and when working fullyime after high school they may get a little over it like 15-20 but if a person starts working after graduation then he or she will get a much highe pay and a much promising career.

The present value refers to the value of something in the present and it is computed to find the NPV. While the cost benefit analysis refers to the analysis of situations where the costs incurred and the benefits derived are compared to arrive at a situation or conclusion. Both are extremely important at arriving at a decision.