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Prior to beginning work on this discussion forum, read Chapter 9, “The Time Value of Money,” in the Foundations of Financial Management
In this discussion forum, you will determine the rate of return of your MBA degree.
The first step is to calculate the cost of your MBA. If your employer sponsors the cost of your education, you can either use what you would have paid or use opportunity costs as a basis.
After you determine your initial investment, determine the net present value (NPV) of that investment. As an example, let us say “Joe” will be changing jobs when he achieves his MBA and will make 10% more annually as a result. Joe plans to work for 20 more years. His MBA cost was $50,000.
Do you forecast that pursuing an MBA is worth the financial investment? Be sure to show all your calculations.
Prior to beginning work on this discussion forum, read Chapter 11, “Cost of Capital,” in the Foundations of Financial Management textbook and watch the Week 3 Discussion video above with Dr. Kevin Kuznia, Academic Department Chair. Review the WACC and Cost of Capital Allocation (Links to an external site.) interactive.
For this discussion forum, you will provide a real-world example of how capital allocation was successfully (or unsuccessfully) applied.
First, use the Ashford University Library to research an article on capital allocation; many articles are available.
Select and review the article. For your initial post summarize the article and provide a connection between the article’s concepts and readings for the week. Do any of the concepts in your article agree or disagree with the text? Additionally, based on the findings in your article, explain how the Weighted Average of Cost Capital (WACC) influences investment decisions.
the book we read is:
Block, S. B., Hirt, G. A., & Danielsen, B. R. (2019). Foundations of financial management (17th ed.). Retrieved from https://www.vitalsource.com
The full-text version of this e-book is available through your online classroom.