A Business Week table ("The High Price of Admission," October 23, 2006, 60) compares various business schools by calculating how long it takes to break even on a student's investment in a Masters of Business Administration (MBA). For each school, the magazine staff divides the salary premium-the increase in salary paid to those with an MBA from a particular school-by the average cost of obtaining the degree.
What alternative method would you suggest for deciding which school to attend and, even more importantly, whether an MBA is a good long-term investment? Which method is best and why?