Josie has an undergraduate degree in economics and has been working as a utility rate analyst at the local electricity utility.If she continues on her present career path,the present value of her lifetime earnings is $250,000.If she takes two years off and gets an MS degree in economics,the present value of her lifetime earnings is $275,000.The annual cost of an MS degree in economics is $15,000 and the interest rate is 8%.
Josie should
A) get the MS degree because her lifetime earnings will increase $25,000.
B) get the MS degree because more education is always better than less education.
C) not get the MS degree because $30,000 is greater than $25,000.
D) not get the MS degree if the present value of cost exceeds the present value of benefit.
Correct Answer:
Verified
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