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The purpose of this paper is to analyze the decision of pursuing an MBA or to continue with the existing job. Will MBA would add value or my existing job returns will be more. The paper has helped us to learn the importance of capital budgeting.

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Introduction

MBA Returns Vs Job Returns Name of the Student 2/22/2012 . Abstract The purpose of this paper is to analyze the decision of pursuing an MBA or to continue with the existing job. Will MBA would add value or my existing job returns will be more. The paper has helped us to learn the importance of capital budgeting. This paper will help us in defining the interrelations between eliminatory indicators of a proposal or an investment as well as project realization and its profitability is measured. In this paper we have used NPV method for a situation and how it helps in taking decision of that position. For real life situation the approach of NPV can be really very beneficial. Introduction We are going to invest cash with high hopes of getting a large future returns. But would the anticipated payback be enough to cover all our initial investment given the investments of high risk? Further, will any of our alternative investment decision provide us with better financial returns? Answering to these questions is the essence of capital budgeting, and NPV (net present value) analysis which provides us gold standard answers. ...read more.

Middle

Hypothesis: I would take an MBA education if the NPV of cash flow is positive. If the NPV of cash flow is negative I will not pursue my MBA. Methodology: We are using the Net present value approach to analyse and make decision. While the net present value approach is widely accepted as the right framework for cash inflows and out flows to consider an investment or to consider a project. In our case taking admission into the MBA school or not is the purpose. "Average Costs Versus Net Present Value by E. Van der Laan, 67 -69, 1998" Net present value (NPV) is the difference between Cash flows. In other words the difference between the cash inflows - cash outflows. Net present value analysis helps us to determine the reliability of future cash inflow. It is mainly calculated to find out the profitability of project or an investment. In our case we have found to take decision whether our decision of doing a MBA is profitable or not. Net present value is calculated based on the below formula. We have calculated the NPV in the excel spreadsheet. (Appendix 1) Formula: We have used this formula for our calculation: Purpose Net present value helps us to compare the value of dollar in future, taking into consideration the rate of interest. ...read more.

Conclusion

$36,000.00 $60,000.00 $0.79 $28,577.96 $47,629.93 4 $36,000.00 $60,000.00 $0.74 $26,461.07 $44,101.79 5 $36,000.00 $60,000.00 $0.68 $24,501.00 $40,834.99 6 $36,000.00 $60,000.00 $0.63 $22,686.11 $37,810.18 7 $36,000.00 $60,000.00 $0.58 $21,005.65 $35,009.42 8 $36,000.00 $60,000.00 $0.54 $19,449.68 $32,416.13 9 $36,000.00 $60,000.00 $0.50 $18,008.96 $30,014.94 10 $36,000.00 $60,000.00 $0.46 $16,674.97 $27,791.61 11 $36,000.00 $60,000.00 $0.43 $15,439.78 $25,732.97 12 $36,000.00 $60,000.00 $0.40 $14,296.10 $23,826.83 13 $36,000.00 $60,000.00 $0.37 $13,237.13 $22,061.88 14 $36,000.00 $60,000.00 $0.34 $12,256.60 $20,427.66 15 $36,000.00 $60,000.00 $0.32 $11,348.70 $18,914.50 16 $36,000.00 $60,000.00 $0.29 $10,508.06 $17,513.43 17 $36,000.00 $60,000.00 $0.27 $9,729.68 $16,216.14 18 $36,000.00 $60,000.00 $0.25 $9,008.97 $15,014.94 19 $36,000.00 $60,000.00 $0.23 $8,341.63 $13,902.72 20 $36,000.00 $60,000.00 $0.21 $7,723.74 $12,872.89 21 $36,000.00 $60,000.00 $0.20 $7,151.61 $11,919.34 22 $36,000.00 $60,000.00 $0.18 $6,621.86 $11,036.43 23 $36,000.00 $60,000.00 $0.17 $6,131.35 $10,218.92 24 $36,000.00 $60,000.00 $0.16 $5,677.18 $9,461.96 25 $36,000.00 $60,000.00 $0.15 $5,256.64 $8,761.07 26 $36,000.00 $60,000.00 $0.14 $4,867.26 $8,112.11 27 $36,000.00 $60,000.00 $0.13 $4,506.73 $7,511.21 28 $36,000.00 $60,000.00 $0.12 $4,172.89 $6,954.82 29 $36,000.00 $60,000.00 $0.11 $3,863.79 $6,439.65 30 $36,000.00 $60,000.00 $0.10 $3,577.58 $5,962.64 31 $36,000.00 $60,000.00 $0.09 $3,312.58 $5,520.96 32 $36,000.00 $60,000.00 $0.09 $3,067.20 $5,112.00 33 $36,000.00 $60,000.00 $0.08 $2,840.00 $4,733.34 34 $36,000.00 $60,000.00 $0.07 $2,629.63 $4,382.72 35 $36,000.00 $60,000.00 $0.07 $2,434.84 $4,058.07 36 $36,000.00 $60,000.00 $0.06 $2,254.48 $3,757.47 37 $36,000.00 $60,000.00 $0.06 $2,087.49 $3,479.14 $459,906.43 $627,844. ...read more.

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