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Assume all salaries are paid at the end of each year; evaluate the three options for...

Assume all salaries are paid at the end of each year; evaluate the three options for peter

option 1. Stay in his current job

Annual salary $520,000 and his salary is expected to increase by 5.25% per year for 38 more years until retirement.

Peter's remuneration package includes base salary and medical and dental health care insurance plans. Assume individual income tax rate is 20%.

Option 2. Nanyang business school full-time MBA 1 yr plan

Tuition fee is $55,000, books and other supplies cost $1,200. Upon graduation, peter expects to receive offers with remuneration package that includes a base salary of $520,000 per year, signing bonus of $30,000 as well as medical and dental health care insurance. His salary will be increased by 7.25%. Individual tax rate is 20%.

Option 3. Singapore management university 1 yr plan

Tuition fee is $60,990, books and other supplies cost is $1,500. Upon graduation, peter expects to receive offers with a remuneration package that includes a base salary of $540,000 per year, signing bonus of $10,000 as well as medical and dental health care insurance plans. His salary will be increased by 7% per year. Assume individual income tax rate is 20%.

* Peter estimates that the living and miscellaneous expenses at both universities may cost $4,000 more. Assume the tuition fee as well as the additional living and miscellaneous expenses are payable at the beginning of each term and the discount rate is 8%.

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jeff jeffy answered 1 year ago
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