SAUDI COMMUNITY INSTITUTE

FINANCIAL MANAGEMENT BBA LEVEL – II

ASSIGNMENT
SOLVE THE DISCUSSION QUESTIONS OF CASE STUDY

SUBMITTED TO
MISS. MADIHA ASIF

SUMBITTED BY GROUP# 4
AMBREEN MALIK AFRAN SULTAN MISBAH REHMAN MODINA MONIR TEHMINA MOH. NASIR

DATE OF SUBMISSION
7TH JULY, 2010

For the completion of it we extend our sincere gratitude to our subject teacher Miss Madiha for her constant support and help. namely Ambreen Malik. Misbah Rehman. Modina Monir and Tehmina Mohammad Nasir have completed this finance assignment.ACKNOWLEDGEMENT We the students of SCI BBA level 2 Group #4 . . Afran Sultan.

2. Both schools offer a health insurance that will cost 3000% per year.5% per year. Questions: 1. Because of the higher salary. Ben has a saving account with enough money to cover his entire cost for the MBA program. his average income tax rate will increase to 31%. and his salary is expected to increase at 3% per year until retirement. Books and other supplies are estimated to cost 2500 per year. Ben expects that after graduation from Wilton. with a tuition cost of 7500 $ to be paid upon matriculation. with the 10000$ signing bonus. Ben also estimates that room and board expenses will cost 20. Although internships are encouraged by both schools. Ben currently works at the money management firm of Dewy and Louis. with a 15000 signing bonus. no salary can be paid. The Bradley School is smaller and less well known then the Ritter College.000 $ per year. His average tax rate at this level of income will be 29%. he will receive a job offer for a job offer for about 95000 per year.000 payable at the beginning of each school year. The Bradley school of Business at Mount Perry College began its MBA program 16 years ago. he has narrowed his choice to either Wilton University or Mount Perry College. and his current average tax rate is 26%. Bradley offers an accelerated one year program. He feels that an MBA degree would allow him to achieve this goal. his goal is to become an investment banker. other than internships. His annual salary at the firm is 50.CASE STUDY MBA DECISION Ben Bates Graduated from college six years ago with a finance undergraduate degree. His current job includes a fully paid health insurance plan. factors affect Ben’s decision to get an MBA? 3. The Salary at this job will increase at 4% per year. neither school will allow its students to work while enroll in its MBA program. what is the best option for Ben from strictly financial standpoint? . Although he is satisfied with his current job. The appropriate discount rate is 6. Rifter college of Business at Wilton University is one of the top MBA program in the country. He is currently 28 years old and expects to work for 35 more years.000$ per year at both schools. Ben thinks that he will receive an offer of 78000$ per year upon graduation. Assuming all salaries are paid at the end of each year. payable at beginning of the year. Books and other supplies for the program are expected to cost 3500$. After examining schools. the salary at this job will increase at 3. perhaps non-quantifiable. How does Ben’s age affect his decision to get an MBA? What other. The MBA degree requires full time enrollment at the university the annual tuition is 60. to get class credit for the internships.5%.

then he would have only 33 more years of work. there is a list of such factors. In case of Ben. simply. He has to carefully decide whether he needs to enroll into the program or not. • He will have to alter his attitude to divert it towards education since he has been on a 6-year gap from university • He would have to invest his time. means lack of concentration and serious attitude towards studies. by definition means. as he is already employed and needs to find time to enroll into fulltime MBA program. which is not consistent with his initial plan. • Consider the geographical diversity: he has to consider the location of his preferred university. since he is already employed. factors affect Ben’s decision to get an MBA? Non-quantifiable. He plans to work for 35 more years. Q2. The time period he has taken off from education and invested into his career. The long break from education. Moreover. as a Finance Major. not being able to allocate the quantity or determine the quantity.How does Ben’s age affect his decision to get an MBA? Ben graduated 6 years ago. perhaps non-quantifiable.Q1. is a hindrance to his enrollment into MBA program. If he does.What other. his career decision will have to be altered. • Demonstrated leadership • Moral Character • Analytic Ability • Maturity • Character references .

what if the health plan at the universities doesn’t cover large payments • Alumni are a big factor.Assuming all salaries are paid at the end of each year. Because of the higher . what is the best option for Ben from strictly financial standpoint? Ben expects that after graduating from Wilton. for example. The Salary will increase at 4% per year.• Racial/Ethnic/Cultural background • Stated Goals • Communication Skills • Demonstration of Commitment and Determination • Prior Applicants • Creativity • Attention to Detail • Extracurricular Activities • His expectation of medical needs. he will receive a job offer for about 95000 per year. being able to network with a large number of them helps a lot in the future Q3. with a 15000 signing bonus.

with the 10000$ signing bonus. annually.5% per year. In case of graduating from Wilton university.763. his total income will be $113. If he decides to stay. In case of Mount Perry College. Ben expects that he will receive an offer of 78000$ per year upon graduation.salary. he will not have income. instead there will be cash outflow from his savings. his average income tax rate will increase to 31%. But after.800 and after deducting the tax rate (31%) his net income at the end of the year will be three lack sixty six thousand nine hundred and ninety six($366996). after graduating from Mount Perry. His average tax rate at this level of income will be 29%. the salary will increase at 3. his total income will be $90730 and after subtracting the tax rate (29%) his net income at end of the year will be three lack twelve thousand seven hundred and sixty two ($312762). His average tax rate would be 26%. If he decides to go to Rifter or Bradley. from strictly financial point of view. By comparing the Net incomes. Similarly. he will continue earning what he is earning at the moment. Staying at the current job. As after graduating from this university he will have superior salary package with high increasing rate and bonus. . cash inflow. during the period of his enrolment. for Ben the best option. His net income in 35 years of career will be $750. will be Wilton University. 000 with a 3% increment on his salary. will result in his annual income of $50.

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