A WOMAN HAS A JOB WITH AN ANNUAL SALARY OF $55000.00 PER YEAR.HER SALA

QUESTION

A WOMAN HAS A JOB WITH AN ANNUAL SALARY OF $55000.00 PER YEAR.HER SALARY IS EXPECTED TO INCREASE AT 3% PER YEAR UNTIL RETIREMENT.HER CURRENT AVERAGE TAX RATE IS 26%SHE IS PRESENTLY 28 YEARS OLD AND EXPECTS TO WORK FOR ANOTHER 38 YEARS.SHE WILL RECIVE A MONETARTY GIFT FRO HER MOM TO COVER THE ENTIRE ¦
what is the present value of tuition & expenses? Total Fee & Exp pa is sum of below :- 1. Tution Fee $63000 2. BOOKS &OTHER SUPPLIES =$2500 3. ROOM & BOARD =$20,000 4. OTHER ITEMS =$3000¦

”””- Total Tution fee & exp pa = $88,500 So PV of Tution fee & exp = 88500 88500/(1 Kd)^1 Where Kd is cost of capital whcih is not given

ANSWER:

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