Floyd is now working on a job that pays $35,000 per year
Question # 00549716
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Updated on: 06/21/2017 01:48 AM Due on: 06/21/2017

Floyd is now working on a job that pays $35,000 per year. He is contemplating a full-time one-year automobile mechanics course that entails costs of $15,000 for books and tuition (Note: he will not be able to work at all while he is studying). Floyd estimates that the course will increase his income to $50,000 in each of the three years following completion of the course. At the end of those three years, Floyd plans to retire to a commune in Boulder, CO. The relevant discount rate is 5 percent. What is the net present value of the educational investment project? Is it economically rational for Floyd to enroll in the course? Explain. Please show your work using spreadsheet software, such as Excel.

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Rating:
5/
Solution: Floyd is now working on a job that pays $35,000 per year