Personal investment analysis for a service companya masters, Ask an Expert

Accounting

Personal investment analysis for a service company

A Masters of Accountancy degree at Central University costs $12,000 for 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 $50,000 per 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 $66,000 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%.

1. Determine the net present value of cash flows from an undergraduate degree. Use the present value table provided in this chapter in Exhibit 5.

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.

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

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91885038

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - gemmex inc is a consulting company that

Question - Gemmex Inc. is a consulting company that specializes in systems design and implementation. The following transactions are recorded by Gemmex during July, its first month of operations. July 1: Issued common sh ...

Question - the social security administration increased the

Question - The Social Security Administration increased the taxable wage base from $118,300 to $120,100. The 6.2% tax rate is unchanged. Joe Burns earned over $120,000 each of the past two years. a. What is the percent i ...

Question - state your accounting method of choice and

Question - State your accounting method of choice and describe several types of business transactions you expect to incur. Explain how the transactions will impact your financial statements. How will the transactions inf ...

Question - the following items were taken from the

Question - The following items were taken from the financial statements of P. Sheridan Company (all amounts are in thousands) Long-term debit $1,100 Accumulated-depreciation equipment $15,300 Prepaid Insurance 990 Accoun ...

Question - jalisco corporation has net income of 281000 for

Question - Jalisco Corporation has net income of $281,000 for the year ended December 31, 2010 and common shares outstanding of 100,000. The company did not issue or repurchase additional common shares during the year. J ...

Question - assume a legal entitys capital structure

Question - Assume a Legal Entity's capital structure consists of the following accounts: Short-term note payable $ 200,000 Long-term note payable 500,000 Mandatorily redeemable preferred stock 350,000 Common stock 60,000 ...

Question - following are the transactions for abc computer

Question - Following are the transactions for ABC Computer Service's first month of business, September 2018: Sept 1 The owner invested $10,000 into the business in exchange for common stock. Sept 4 Purchased equipment f ...

Question - on may 1 2016 benzs sandwich shop loaned 14000

Question - On May 1, 2016, Benz's Sandwich Shop loaned $14,000 to Mark Henry for one year at 6 percent interest. Required - a. What is Benz's interest income for 2016? b. What is Benz's total amount of receivables at Dec ...

Question - fundamentals of revenue recognition - respond to

Question - Fundamentals of Revenue Recognition - Respond to the questions related to the following statements. 1. A wholly unperformed contract is one in which the company has neither transferred the promised goods or se ...

Question - the structure of a typical organization is

Question - The structure of a typical organization is similar to a pyramid, with different levels that require one consistent type of information to assist with all managerial decision making. Explain a typical corporati ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert