Assignment Suppose that you are considering whether to enroll in a summer comput

Question

Assignment Suppose that you are considering whether to enroll in a summer computer-training program that costs $2500. If you take the program, you will have to give up $1500 of earnings from your summer job. You determine that the program will increase your earnings by $500 per year for each of the next 10 years. Beyond that, it is not expected to affect your earnings. If you take the program, you will have to borrow the funds at an 8% interest rate. From a strictly monetary viewpoint, should you enroll in the program? Specific Instructions As your post for this discussion, address the following specific questions ~ 1. State the direct costs. If there are no direct costs, state that total direct costs = $0. 2. State the opportunity costs. If there are no opportunity costs, state that total opportunity costs = $0. 3. State the total costs (present value). If there are no total costs, state that total costs = $0 4. Calculate and state the present value of the additional future earnings rounded up to two decimal places. 5. Should you enroll in the program? Explain why or why not. Note that your explanation should refer to calculations guiding your decision.

Explanation / Answer

Direct costs 2,500

Opportunity costs 1,500

Total costs (present value) 4,000

Present value of future earnings 500*6.71008 (from annuity table at 8% for 10 years)= 3,355.04

Since present value of costs exceeds present value of earnings you should not enroll in the course.

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