Reference no: EM132396529

Your younger sister has come to you for career advice as she is about to enter university, and there are two options open for her. Her first option is to study engineering. If she does this, her undergraduate degree would cost her $15,000 per year for four years. Having obtained her undergraduate degree, she would then need to gain two years of job related experience (like an internship). During this time, she would earn $20,000 in the first year, and $25,000 in the second year. She would then need to obtain a master's degree which will cost $20,000 a year for two years. After the completion of her Master's degree, she will be a fully qualified engineer, and it will take her one year to find a job. Once she finds the job, she will earn $40,000 per year for 25 years with zero growth. Her other option is to study Finance. If she does this, she would pay $15,000 a year for four years. After the completion of her degree, she will find a job right away. She will start with a yearly salary of $35,000, and her salary will increase by 1% per year. She expects to work for 30 years. All earnings and costs are paid at the end of the year. What advice would you give her if the discount rate is 10% per year?