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# Project 5 - Human Capital Investment Instructions:clocit file. 1rou may consult with the classmatesfinstructor at any time. Please show your worlr:...

1.  Josh is not sure if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates that the per year cost to attend Texas Tech including room and board is \$27,750. He also assumes the cost will rise by 5.5% per year. How much is a 4 year degree going to cost Josh?

2.  Josh recognizes that not only will he have the costs of attending school, but he will also be giving up a salary while he attends school. He figures the average salary for those with only a high school diploma is \$30,000. He assumes he would receive a 2.4% cost of living raise each year. Determine how much money he will forgo while attending school.

3.  If Josh adds the cost of college with the salary he will forgo by attending college, he finds it will cost: __________________ in total. (Keep in mind that this does not include any interest on loans needed to pay for school.)

4.  To help him determine if it really is worth it to get a college education, Josh wants to see what the return on investment (ROI) will be 20 years after graduation. After some research, Josh discovers that for him career choice he can expect to earn \$2 million with a degree and \$900,000 without one. What is Josh's 20-year ROI? (Hint: Use TVM and solve for I/y.)

5.  Is this is a good ROI or not? List at least 3 other factors besides ROI that Josh should consider.

Project 5 - Human Capital Investment
Instructions: Please complete this assignment and submit though Elackboard as a .clocit file. 1rou may
consult with the classmatesfinstructor at any time. Please show your worlr: list out the N, In. Fir, lit-ITr and Fir with correct signs and yo erthought process. 1. Josh Is not sure If he should attend college or not. Part of his decision wlll he lsased on the return on Investment of college. He estlmates that the per year cost to attend Texas Tech Including room and
lsoard is SJTJE El. He also assumes the cost will rlse by 5.516 per year. How much is a at year degree going to cost Josh? 2. Josh recognises that not only wlll he haye the costs of attending school, but he will also he glylng up a
salary whlle he attends school. He figures the ayerage salary for those with only a high school
diploma is \$3ﬂ,ﬂﬂﬂ. He assumes he would receive a 2.416 cost of llylng ralse each year. Determine how much money he will forgo while attendlng school. El. If Josh adds the cost of college with the salaryI he will forgo by attending college, he ﬁnds It will cost:
In total. {Keep in mind that this does not include any Interest on Icons needed
to poyjor schooJ'J a. To help- him determine ii it really is worth it to get a college education; Josh wants to see what the
return on Investment [Ftﬂl] will he In years after grad uatlon. After some research, Josh dlscoyers that
for him career choice he can expect to earn 52 million with a degree and Egmyﬂﬂﬂ with out one.
what is Josh's ED-year HUI? (Hint.- IJse WM ondsoryejor {ff-J 5. Is this Is a good HUI or not?l Ijst at least 3| other factors hesldes Ftﬂl that Josh should consider.

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