What is jill present value of not obtaining the masters

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Jill is considering getting a masters degree in dance. If she does, she will spend $40,000 on tuition and books to get a college education (during the first time period), she will spend $130,000 on tuition and books to get a master's degree (during the second time period), and her degree will earn her $900,000 during the remainder of her work-life (during the third time period). If she does not go to school, she will earn $70,000 a year for the first two periods and $500,000 for the third period. Jill's discount rate is11%.

a) Approximately what is Jill's present value of obtaining a master's degree?

b) What is Jill's present value of not obtaining the masters degree?

c) Will she choose to go to school? why?

Reference no: EM132006675

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