How finance works, What are the costs? Can you think of

How finance works

Reference no: EM133608842

Question: Net present value is calculated by summing the discounted expected cash flows and subtracting the cost. If the sum of the future discounted cash flows is higher than the cost, then you invest. If the cost is higher than the sum of the discounted future cash flows, then you don't invest. We conduct mental NPV analysis whenever we encounter a decision. We ask the question: Is the benefit higher than the cost? Depending on the answer, we make our decisions. Pursuing education is an example of a major life decision that involves benefits and costs. In his book "How Finance Works", Mihir Desai breaks down the value of education in dollar terms. The article is attached. Article: "Valuing an Education" The following version of this article will be more accessible for screen-reader use: Valuing an Education (PDF) What are the benefits (tangible and intangible) that you are expecting to generate from getting an MBA? What are the costs? Can you think of instances where investment in education leads to a negative NPV (meaning the costs are higher than the benefits)?

Reference no: EM133608842

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