Finance

The VS… Uses sophisticated artificial intelligence algorithms that allow the user to speak naturally ND have the computer Input the text, correct spelling and grammatical errors, and format the document according to preset user guidelines. The VS… Even suggests alternative phrasing and sentence structure, and It provides detailed stylistic diagnostics. Based on a proprietary, very advanced software/ hardware hybrid technology, the system Is a full generation beyond what Is currently on the market.

To introduce the VS…, the company will require significant outside investment. Nick has made the decision to seek this outside financing in the form of new equity investments and bank loans. Naturally, new investors and the banks will require a detailed financial analysis. Your employer, Angus Jones & Partners, LLC, has asked you to examine the financial statements provided by Nick.

Although internships are encouraged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $ 60,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 0 more years. His current Job includes a fully paid health insurance plan, and his current average tax rate in 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program.

The Ritter College of Business at Hilton University is one of the top MBA programs is the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $65,000, payable at the beginning of each school year. Books and other supplies are estimated to cost $3,000 per year. Ben expects that after graduation from Hilton, he ill receive a Job offer for about $110,000 per year, with a $20,000 signing bonus. The salary at this Job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago.

The Bradley School is smaller and less well known than the Ritter College Bradley offers an accelerated, one-year program, with a tuition cost of $80,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he ill receive an offer of $92,000 per year upon graduation, with an $18,000 signing bonus. The salary at this Job will increase at 3. 5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more per year at both schools than his current expenses, payable at the beginning of each year. The appropriate discount rate is 6. Percent. 1. How does Ben’s age affect his decision to get an MBA? . What other, perhaps unquantifiable factors affect Ben’s decision to get an MBA? 3. Assuming all salaries are paid at the end of each year, what is the best option for analysis is to calculate the future value of each option. How would you evaluate this statement? 5. What initial salary would Ben need to receive to make him indifferent between attending Hilton University and staying in his current position? 6. Suppose, instead of being able to pay cash for his MBA. Ben must borrow the money. The current borrowing rate is 5. 4 percent. How would this affect his decision? $ 24520102009