(Relevant costs) Assume that you are about to graduate from your university and are deciding whether to apply for graduate school or enter the job market. To help make the decision, you have gathered the following data:
|
Costs incurred for the bachelor’s degree |
$163,000 |
|
Out of pocket costs for a master’s degree |
$92,000 |
|
Estimated starting salary with B.A. |
$48,400 |
|
Estimated starting salary with MA |
$66,800 |
|
Estimated time to complete master’s degree |
2 years |
|
Estimated time from the present to retirement |
40 years |
a. Which of these factors is relevant to your decision?
b. What is the opportunity cost associated with earning the master’s degree?
c. What is the out of pocket cost to obtain the master’s degree?
d. What other factors should you consider before making a decision?