Although older Americans are most afraid of crime, it is young people who are more likely to be the actual victims of crime. It seems that older people are more cautious about the people with whom they associate. A national survey showed that 10% of all people ages 16-19 have been victims of crime.† At a high school, a random sample of

n = 65 students

(ages 16-19) showed that

r = 11

had been victims of a crime. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value a small amount and thereby produce a slightly more "conservative" answer.

(a) Do these data indicate that the population proportion of students in this school (ages 16-19) who have been victims of a crime is different (either way) from the national rate for this age group? Use

α = 0.05.

Do you think the conditions

np > 5

and

nq > 5

are satisfied in this setting? Why is this important?(i) What is the level of significance?


State the null and alternate hypotheses.

H₀: p = 0.10; H₁: p < 0.10H₀: p = 0.10; H₁: p > 0.10    H₀: p = 0.10; H₁: p ≠ 0.10H₀: μ = 0.10; H₁: μ ≠ 0.10H₀: μ = 0.10; H₁: μ < 0.10H₀: μ = 0.10; H₁: μ > 0.10

(ii) What sampling distribution will you use? What assumptions are you making?

The standard normal, since np < 5 and nq < 5.The standard normal, since np > 5 and nq > 5.    The Student's t, since np > 5 and nq > 5.The Student's t, since np < 5 and nq < 5.

What is the value of the sample test statistic? (Round your answer to two decimal places.)


(iii) Find (or estimate) the P-value.

P-value > 0.5000.250 < P-value < 0.500    0.100 < P-value < 0.2500.050 < P-value < 0.1000.010 < P-value < 0.050P-value < 0.010

Sketch the sampling distribution and show the area corresponding to the P-value.

(iv) Based on your answers in parts (i) to (iii), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?

At the α = 0.05 level, we reject the null hypothesis and conclude the data are statistically significant.At the α = 0.05 level, we reject the null hypothesis and conclude the data are not statistically significant.    At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are statistically significant.At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are not statistically significant.

(v) Interpret your conclusion in the context of the application.

There is sufficient evidence at the 0.05 level to conclude that there is a difference from the national average for the population proportion of crime victims.There is insufficient evidence at the 0.05 level to conclude that there is a difference from the national average for the population proportion of crime victims.    

(b) Find a 90% confidence interval for the proportion of students in this school (ages 16-19) who have been victims of a crime. (Round your answer to three decimal places.)

(c) How large a sample size should be used to be 95% sure that the sample proportion p̂ is within a margin of error

E = 0.04

of the population proportion of all students in this school (ages 16-19) who have been victims of a crime? Hint: Use sample data p̂ as a preliminary estimate for p. (Round your answer up to the nearest student.)
students

Although older Americans are most afraid of crime, it is young people who are more likely to be the actual victims of crime. It seems that older people are more cautious about the people with whom they associate. A national survey showed that 10% of all people ages 16-19 have been victims of crime.† At a high school, a random sample of

n = 66 students

(ages 16-19) showed that

r = 10

had been victims of a crime. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value a small amount and thereby produce a slightly more "conservative" answer.

Do you think the conditions

np > 5

and

nq > 5

are satisfied in this setting? Why is this important?

(i) What is the level of significance?

State the null and alternate hypotheses.

H₀: μ = 0.10; H₁: μ ≠ 0.10H₀: p = 0.10; H₁: p < 0.10    H₀: μ = 0.10; H₁: μ > 0.10H₀: p = 0.10; H₁: p > 0.10H₀: μ = 0.10; H₁: μ < 0.10H₀: p = 0.10; H₁: p ≠ 0.10

(ii) What sampling distribution will you use? What assumptions are you making?

The standard normal, since np < 5 and nq < 5.The Student's t, since np > 5 and nq > 5.    The standard normal, since np > 5 and nq > 5.The Student's t, since np < 5 and nq < 5.

What is the value of the sample test statistic? (Round your answer to two decimal places.)

(iii) Find (or estimate) the P-value.

P-value > 0.5000.250 < P-value < 0.500    0.100 < P-value < 0.2500.050 < P-value < 0.1000.010 < P-value < 0.050P-value < 0.010

Sketch the sampling distribution and show the area corresponding to the P-value.

(iv) Based on your answers in parts (i) to (iii), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?

At the α = 0.05 level, we reject the null hypothesis and conclude the data are statistically significant.At the α = 0.05 level, we reject the null hypothesis and conclude the data are not statistically significant.    At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are statistically significant.At the α = 0.05 level, we fail to reject the null hypothesis and conclude the data are not statistically significant.

(v) Interpret your conclusion in the context of the application.

There is sufficient evidence at the 0.05 level to conclude that there is a difference from the national average for the population proportion of crime victims.There is insufficient evidence at the 0.05 level to conclude that there is a difference from the national average for the population proportion of crime victims.    

(b) Find a 90% confidence interval for the proportion of students in this school (ages 16-19) who have been victims of a crime. (Round your answer to three decimal places.)
lower limit    upper limit    
(c) How large a sample size should be used to be 95% sure that the sample proportion p̂ is within a margin of error

E = 0.05

of the population proportion of all students in this school (ages 16-19) who have been victims of a crime? Hint: Use sample data p̂ as a preliminary estimate for p. (Round your answer up to the nearest student.)
students

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.3 percent.

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben— from a strictly financial standpoint?

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve his goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program.

Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary expected to increase at 3% per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26%. Ben has savings account with enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4% per year. Because of the higher salary, his average income tax rate will increase to 31%. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago.

The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon the graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5% per year. His average tax rate at this level of income will be 29%. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 4.7%

Questions:

1.How does Ben's age affect his decision to get an MBA?

2.What other, perhaps nonquantifiable, factors affect Ben's decision to get an MBA?

3.Assuming all salaries are paid at the end of each year, what is the best option for Ben from a strictly financial standpoint?

4.Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5.What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6.Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision

David Jetter graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve his goal. After examining schools, he has narrowed his choice to either Prentice University or Mount Alliance College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program.

David currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $50,000 per year, and his salary expected to increase at 3 % per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 %. David has savings account with enough money to cover the entire cost of his MBA program.

The Ritt College of Business at Prentice University is one of the top MBA programs in the country. The MBA degree requires two years of full time enrollment at the university. The annual tuition is $65,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3000 per year. David expects that after graduation from Prentice, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 % per year. Because of the higher salary, his average income tax rate will increase to 31 %.

The Bradel School of Business at Mount Alliance College began its MBA program 16 years ago. The Bradel School is smaller and less well known than the Ritt College. Bradel offers an accelerated, one – year program, with a tuition cost of $80,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. David thinks that he will receive an offer of $92,000 per year upon the graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5 % per year. His average tax rate at this level of income will be 29 %.

Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. David also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.5 percent.

1. How does David’s age affect his decision to get an MBA? Explain why?

2. What other, perhaps non- quantifiable factors affect David’s decision to get an MBA? Explain in detail

3. Assuming all salaries are paid at the end of each year, what is the best option for David – from a strictly financial standpoint? Explain why in detail with calculations.

4. David believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement? So what is the future value of each option?

5. What initial salary would David need to receive to make him indifferent between attending Prentice University and staying in his current position?
Explain in detail with calculations.

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon graduation, with an $18,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6.3 percent.

1. How does Ben’s age affect his decision to get an MBA?

2. What other, perhaps nonquantifiable factors affect Ben’s decision to get an MBA?

3. Assuming all salaries are paid at the end of each year, what is the best option for Ben—from a strictly financial standpoint?

4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?

Davis Uniform Corporation operates a store that sells uniforms. The following are the transactions that occurred during the first quarter of operation- Jan. 1 to Mar. 31, 2019.

Jan.     1   Davis issues 20,000 shares of $1 par value common stock with an issuing price of $10

per share.

Jan.     2   Purchased furniture and fixtures from Acme Furniture for $14,400 cash.

Jan.     4   Purchased $1,600 of office supplies for cash.

Jan.   15   Paid $36,000 in advance for one year’s rent on the store building. The rent begins with

                Jan 15. The company counts January for half a month.

Jan.   31   Paid salaries to employees for the first month, $3,600.

Feb.    1    Purchased $62,400 of uniforms inventory on account from the Birdwell Uniforms

                 Manufacturing Company.

Feb.    1    Borrowed $66,000 from a local bank and signed two notes. The first note of                  

                $21,000 requires payment of principal in six months with annual interest rate at 4%.

                The second note of $45,000 requires the payment of principal in two years and annual

interest payment with annual interest rate at 5%.

Feb.    6    Sold uniforms on account to St. Jude’s School for $7,200. Cost of the uniforms sold

is $4,800.

Feb.    9   Paid Birdwell Uniforms Manufacturing Company $50,000 for the purchase on Feb. 1.

Feb. 20    Sold uniforms to a chemical factory for $79,200 cash. Cost of the uniforms sold is

                 $47,520.

Feb. 23    Purchased $10,000 of uniforms inventory on account from the Birdwell Uniforms

                 Manufacturing Company.

Feb. 28    Paid salaries to employees for the month of February, $4,200.

Mar.   1   Sold uniforms to the football team of Robert Lee High School, and accepted a $12,000,

three-month, note receivablewith annual interest rate at 5%. Cost of the uniforms

sold is $9,600.

Mar.   1   Subleased a portion of the building to a jewelry store. Received $3,000 in advance

for three months’ rent beginning on Mar. 1.

Mar.   3   Some uniforms were returned by the chemical factory which made a purchase on

                Feb. 20. The selling price and cost of the returned uniforms is $7,200 and 4,320,

respectively. Cash of $7,200 is refunded to the customer.

Mar. 23   Paid Birdwell Uniforms Manufacturing Company $14,400 for the purchases in Feb.

Mar. 25   Received $5,800 cash from St. Jude’s School.

Mar. 30   The corporation announced and paid its shareholders cash dividends of $2,500.

Requirements:

1. Analyze the transactions and record journal entries in General Journal.

2. Open accounts in General Ledger and post from the General Journal to the general ledger accounts.

3. Record adjusting entries in General Journal and post to the general ledger accounts.

Additional information:

1. At the end of March, $900 of supplies remained.

2. The furniture and fixtures have a useful life of six years and will be worthless at the end of their useful life.

3.    Salaries for the month of March are $4,600, and will be paid in April.

4.    The company’s management estimated that of the $1,400 remaining on account from St.

Jude’s School, $200 would be uncollectible.

5. Income tax rate applied to the company is 21%.

4. Prepare a worksheet as of Mar 31, 2019.

5. For Davis Uniform Corporation as of Mar 31, 2019, prepare the financial statements

including Income Statement (multiple-step with EPS section), Classified Balance Sheet,

and Statement of Stockholders’ Equity. Statement of Cash Flows is not required.

6. Prepare closing entries to close the temporary accounts and post to the general ledger accounts.

Before reading Detroit's Forgotten History by Bill McGraw, I had no idea that slavery occurred anywhere in Michigan, especially in Detroit. From middle school to high school, I learned a good amount of knowledge on slavery, but I was led to believe that slavery only occurred in Southern states. And for the southern states still having slavery this resulted in the Civil War. Thinking about it now, my best knowledge of slavery are the events that occurred because of it, instead of slavery itself. For example, the Underground Railroad was taught heavily in school, while the direct subject of slavery wasn't. This is very surprising since the magnitude slavery has on United States's history. Education system neglected teaching the harsh, violent riots of slavery but focused more on uprising events like the Underground railroad. Now events like the Underground railroad deserve recognition, but at the same time we shouldn't shy away from the harsh, violent acts these innocent people endured. Living near Detroit my whole life, and not knowing that slavery played a huge role in the foundation of Detroit is very disappointing. I entirely agree with McGraw's statement that: "Local students learn about the Underground Railroad in school, but Detroit’s slave history is rarely taught.”? In the , Underground Railroad and Violence by Roy E. Finkenbine, Finkenbine addresses the violence that occurred against free black people after the Civil War. Violence was used against African Americans to make them leave or even die. Free blacks from the south and north made their way to the east side of Detroit to live in the neighborhoods. This obviously provoking the fellow neighbors in these neighborhoods, violence then would break out. These acts of violence were meant to push the free slaves away but instead it did the opposite. These free slaves were so desperate and determined to stay free that they were willing to return the violence back. Members of the African American community and some white allies fought back to protect the free slaves wanting to stay free (Finkenbine pg. 23). The law that played a significant role in the uprisings and violence described by Finkenbine was the Fugitive Slave Act of 1793. Violence erupted during this act because slave owners were able to track any of their runaway slaves in the United States. This act did nothing but create more violence because these free slaves were tired of the hardship, so they were going to fight back to live a free life. “Slavery is the ground zero of race relations.” This is an extremely heavy and true statement. After the black community were free by slavery, they were still not accepted in America. With Jim Crow laws and other acts against the black community, the fight was still not over. African Americans had to face the fact that slavery was just the first battle. More racial situations and acts were coming toward them and even this day we see it. Still today racial altercations occur frequently in America and it is just saddening. Noticing the lack of progress this country has made toward this dilemma is truly depressing. As a nation we still can't look or treat people the same, and having to go back to racial objections is horrifying. Taking more action and to keep fighting this oppression is the best way to move forward. Slavery will never be forgotten as a historical period, but not improving from it could be even worse and unforgettable as history goes on.

reply to this comment by discussing and agreeing the topic mentioned, please.

15. A Pew Poll in 2010, found that 50% of adults aged 25-29 had access to only a cell phone, while 40% had access to both a cellphone and landline and 10% had access to only a landline. We wish to conduct a Goodness of Fit Test to see if the results of a poll of a random sample of 130 adults aged 25-29 are significantly different from the 2010 poll results.

The random sample of 130 adults found that 69 had access to only a cell phone, 39 had access to only a landline, and 22 had access to both types of phones.

Which of the following are the correct null and alternative hypothesis for this test?

16. A Pew Poll in 2010, found that 50% of adults aged 25-29 had access to only a cell phone, while 40% had access to both a cellphone and landline and 10% had access to only a landline. We wish to conduct a Goodness of Fit Test to see if the results of a poll of a random sample of 130 adults aged 25-29 are significantly different from the 2010 poll results. The table below presents the observed results.

Compute the expected count for the "BOTH" cell.

17. A Pew Poll in 2010, found that 50% of adults aged 25-29 had access to only a cell phone, while 40% had access to both a cellphone and landline and 10% had access to only a landline. We wish to conduct a Goodness of Fit Test to see if the results of a poll of a random sample of 130 adults aged 25-29 are significantly different from the 2010 poll results.

The random sample of 130 adults found that 69 had access to only a cell phone, 39 had access to only a landline, and 22 had access to both types of phones.

The chi-square statistic was calculated as 9.73 and has a p-value of 0.0077.Using α=0.01 what can you conclude?

18. According to the CDC 2.8% of high school students currently use electronic cigarettes. A high school counselor is concerned that the use of e-cigs at her school is higher.

A test of the following hypothesis Ho: p = 0.028 Ha: p > 0.028 is conducted using a random sample of 50 students at this school and the null hypothesis is rejected. What conclusion can the counselor make?

The MBA Decision

Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University of Mount Perry College.   Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program.

Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $55,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 38 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26%. Ben has savings account with enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Wilton University is one of the top MBA programs in the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $63,000 payable at the beginning of each school year. Books and other supplies are estimated to cost $2,500 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $98,000 per year, with a $15,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent.

The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated one-year program, with a tuition cost of $80,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $3,500. Ben thinks that he will receive an offer of $81,000 per year upon graduation, with a $10,000 signing bonus. The salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent.

Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $20,000 per year at both schools. The appropriate discount rate is 6.5 percent.

Questions

1.            How does Ben’s age affect his decision to get an MBA

2.            What other, perhaps nonquantifiable, factors affect Ben’s decision to get an MBA?

3.            Assuming all salaries are paid at the end of each year, what is the best option for Ben from a strictly financial standpoint?

4.            Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?

5.            What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?

6.            Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 5.4 percent. How would this affect his decision?