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Mini Case | The MBA Decision for Jenna Riberio
Known information:
Ben is 28 years old
His current salary is $65K and his salary is expected to increase 3% per year until retirement, tax
rate 26%
He expects to work 40 more years and plans to retire at 68 years old
MBA Option 1-Ritter College of business at Wilton University offers a 2-year program at $70K
tuition (to be paid at the beginning of each school year), $3k books—after graduation Ben
expects to make $110K per year with a $20K sign on bonus. Annual increase 4% per year, tax
rate 31%
MBA Option 2-The Bradley School of Business at Mount Perry College (not well known) offers
at 1-year program at $85K (to be paid at the time of enrollment), $4500 books—after graduation
Ben expects to make $85K per year with an $18K sign on bonus. Annual increase 3.5% per
year, tax rate 29%
Both schools offer health insurance of $3K per year, room and board $2K, discount rate 6.3%
Dewey and Louis Wilton University
Mount Perry
College
Salary ($) $65,000.00 $110,000.00 $85,000.00
After Tax Salary $64,831.00 $109,659.00 $84,753.50
Tax Rate (%) 26.00% 31.00% 29.00%
Discount rate ® 6.30% 6.30% 6.30%
