S3 - HAAS SCHOOL OF BUSINESS UNIVERSITY OF CALIFORNIA AT...

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H AAS S CHOOL OF B USINESS U NIVERSITY OF C ALIFORNIA AT B ERKELEY UGBA 103 A VINASH V ERMA S OLUTION   TO     H OMEWORK 3 This is Summer 2009, and you want to work out whether going to graduate school for your MBA, an otherwise desirable proposition in every respect, is a financially sound decision. You have been offered a job that pays $144,000 per year starting September 1, 2009, and you plan to take it up if you do not go for an MBA. If you do go for an MBA, you will: (a): [somehow] have to pay $63,000 each on September 1, 2009, and September 1, 2010 toward the cost of education, and (b): start earning only upon graduation in two years, with your post-MBA job starting on September 1, 2011. For computational simplicity, assume that you are paid your annual salary in a lump sum at the end of each working year. You plan to retire on August 31, 2043 whether or not you go for an MBA between 2009 and 2011. For the purposes of this problem you find it reasonable to assume that the term
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This note was uploaded on 04/30/2010 for the course L&S 101 taught by Professor Chow during the Spring '10 term at University of California, Berkeley.

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S3 - HAAS SCHOOL OF BUSINESS UNIVERSITY OF CALIFORNIA AT...

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