Assume that you are about to graduate from your university and are deciding whether to apply for graduate school or enter the job market.
To help make the decision, you have gathered the following data:
Costs incurred for the bachelor's degree .................$163,000
Out-of-pocket costs for a master's degree ............... $92,000
Estimated starting salary with B.A. ....................... $48,400
Estimated starting salary with MA ........................ $66,800
Estimated time to complete master's degree 2 years
Estimated time from the present to retirement 40 years
a. Which of these factors is relevant to your decision?
b. What is the opportunity cost associated with earning the master's degree?
c. What is the out-of-pocket cost to obtain the master's degree?
d. What other factors should you consider before making a decision?