Problem - Personal Investment Analysis

Assignment Help Accounting Basics
Reference no: EM132707054

Problem - Personal Investment Analysis - A Masters of Accountancy degree at Jalapeno University would cost $15,000for an additional fifth year of education beyond the bachelor's degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only the undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn an annual salary of $50,000per year (assumed to be paid at the end of the year) for 10 years. Assume that the average student with a graduate Masters of Accountancy degree is expected to earn an annual salary of $65,000 per year (assumed to be paid at the end of the year) for nine years after graduation. Assume a minimum rate of return of 10%.

Required -

1. Determine the net present value of cash flows from an undergraduate degree. Use the present value tables provided in this chapter. Round to nearest dollar.

2. Determine the net present value of cash flows from a Masters of Accountancy degree, assuming no salary is earned during the graduate year of schooling. Round to nearest dollar.

3. What is the net advantage or disadvantage of pursuing a graduate degree under these assumptions?

Reference no: EM132707054

Questions Cloud

What are interest groups : What are interest groups? Explain. What are the types of activities that are conducted by interest groups?
Explain what impact this change in currency exchange rate : Assume that the plant produced and sold product in the local economy. Explain what impact this change in the currency exchange rate
Social security for retirees is paid through payroll taxes : Social security for retirees is paid through payroll taxes on the current workforce.
Discussing characteristics that resemble dsm-5 categories : Summarize your impressions of the individual, discussing characteristics that resemble DSM-5 categories related to substance-related and addictive disorders.
Problem - Personal Investment Analysis : Problem - Personal Investment Analysis - What is the net advantage or disadvantage of pursuing a graduate degree under these assumptions
Cultural diversity in companies management guide : Read and review The Cultural Diversity in Companies Management Guide and apply them to an international company of your choice
Discuss education financing at k-12 level : Discuss education financing at the K-12 level, in the State of California and San Diego County local level
Managing diversity in today business : What most caught your attention in this course, in terms of job diversity?
Find how much net income would report : If Jill prepared Net Income on an "accrual basis", how much Net Income would she report for 2020? Accounts Receivable $ 9,250 $ 15,927

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd