--%>
Assignment Help - homework help

Inter-temporal Costs and Benefits

Harvey is currently a Junior Analyst at a financial firm.  His annual salary is $30,000, and past experience leads him to believe that the real (inflation adjusted) value of his salary will remain at that level in the future.  (Assume he is paid at the end of the year.)  He aspires to work in office of the firms General Counsel, but to do so he is told he will need a JD. Further inquiries produce the following information:

• It would take three years of full-time study to obtain a JD, and the tuition and fees for each year (payable at the beginning of the year) are $20,000.

• He will need to resign his current position if he enters law school, but he can expect to earn $5,000 per year consulting on social policy issues, payable at the end of each of the three years.

• He is fortunate enough to live in the city in which the university providing the JD program is located, so he can keep his current housing arrangement.

• HE is 35 years old now; he would be 38 if he completes the JD program in timely fashion, and he anticipates working until he is 68.

• Discussions with students who have completed the JD program recently, and who have career interests similar to his lead Harvey to expect the following career profile after completion of the doctoral program at age 38:  Two years of employment as a Managing Director at an annual salary of $35,000 (payable at the end of the year), then at age 40, selection for the General Counsel’s office, at a salary of $55,000, keeping this salary (in constant dollars) until retirement.

• Harvey’s discount rate is three percent per year

Answer the following questions for Harvey:

a. Is it a good financial investment for me to get a JD? (Be sure to describe your answer in detail. Your answer should include a timeline and equations expressing the benefits and costs. If you use Excel to calculate the benefits and costs, please include the worksheet with your answers).

b. What if I wait five years before deciding whether to enter a JD program; how would this make any difference to the calculation of whether this is a good investment for me? (Make sure to indicate how this would alter either your benefit or cost equations; note that you do not need to redo calculations in (a) above)

   Related Questions in Microeconomics

  • Q : Profits and losses in long run In the

    In the long run: (i) purely competitive firms make zero economic profits. (ii) monopolistically competitive firms make zero economic profits. (iii) effective barriers to entry may permit economic profits. (iv) oligopolists and monopolists may realize

    		•
  • Q : Demands and supplies of most goods

    Since longer time intervals are considered, then demands and supplies of most of the goods become: (i) Increasingly independent. (ii) Less subject to the adjustments through buyers and sellers. (iii) Flatter (that is, quantities adjust more fully to p

    		•
  • Q : Graphical shift of supply curve When

    When market supply and demand curves for Velcro shoelaces were projected into a screen at the front of this room, a raise in the supply of Velcro shoelaces would be illustrated graphically by a shift of supply curve: (1) Towards the center of Earth. (2) To the left. (

    		•
  • Q : Problem on Minimum Wage Laws The

    The Minimum wage legislation is UNLIKELY to aid: (i) Skillful workers who compete with untrained workers. (ii) Untrained workers who don’t lose their jobs. (iii) Buyers of goods which are more capital intensive associative to the buyers of labor intensive goods.

    		•
  • Q : Market power as a price maker The only

    The only firm in this figure which has market power as a price maker is: (w) Firm A. (x) Firm B. (y) Firm C. (z) Firm D.

    Q : State normal good Normal good : It is a

    Normal good: It is a good for which, other things equivalent, a rise in income leads to a rise in demand.

    		•
  • Q : Public international law issues The

    The following is a case problem around which the examination paper will be based. In preparation for the examination, you should study the problem scenario and identify the possible public international law issues which might arise, and how the law might be applied to

    		•
  • Q : Substantial market power Any firm which

    Any firm which has substantial market power that: (i) confronts a perfectly elastic demand curve. (ii) can sell as much as this wants at the price that chooses. (iii) strongly affects the price of its output. (iv) is one of several firms in an industr

    		•
  • Q : Price elasticity inconsistent with

    Of the given price elasticities for market supply curves or market demand curves, and the one which is absolutely inconsistent along with standard economic theory would be one for that, across feasible ranges of prices as: (i) supply

    		•
  • Q : Cruise ship pollution-an economic

    This exercise inspects why ‘greywater’ dumped from cruise ships can be vision as an economic difficulty and the complexities of dealing with this.

    		•