CLO #3 – Evaluate short-term versus long-term investment decisions, increasing shareholder values.
CLO #4 – Evaluate short-term versus long-term investment decisions, increasing shareholder values.
Review the Mini Case: The MBA Decision in your textbook on page 132. Then, answer the following questions:
How does Ben’s age affect his decision to get an MBA?
What other, perhaps non-quantifiable, factors affect Ben’s decision to get an MBA?
Assuming all salaries are paid at the end of each year, what is the best option for Ben—from a strictly financial standpoint?
Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement?
What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position?
Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 4.3 percent. How would this affect his decision?
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