Economics is a king subject which has its recognition and importance lies in almost every walk of life. There is no single definition of the term economic exist in this world. According to the majority of the people, economics is the name of how to earn the money and how to consume it. There are two different types of economics, which particularly are macroeconomics and microeconomics in total (Wessels, 2006). Microeconomics is the name or branch of economics that associated with the economics of the individuals as a whole, while macroeconomics is the name of dealing with the branch of economics with the economy of the country as a whole.
Both of these aspects are essential for an investment viewpoint in total. Economics is a thing which has its active recognition in the financial management as well as most of the concepts of economics stride specifically in the field of finance as well and among them, the name of the concepts is Capital Budgeting is well. In the field of Capital Budgeting, there are number of things which strides for like Net Present Value (NPV), Internal rate of return (IRR) and others. The main perspective of this assignment is to apply the capital budgeting technique on a particular scenario of our choice (E. K. Hunt, 2008).
The issue which we are analyzing in this particular analysis is all about analyzing different degrees in total, like MBA, PHD or MS by valuing down its future cash flow into the current state and then has its current values in total. Different tools of Capital budgeting would have been taken into account for the same with a discount rate of 8% in particular.
The alternatives which would be taken into account are NPV, IRR and payback Analysis. The analysis period based upon 5 years of cash inflow and cash outflow as well which have been initiated in the start of the project. The criteria associated with each of the alternative are different, that if the NPV comes in positive, then project should be undertake and consider and if the computed IRR is higher than the current discount or hurdle rate of the company, then it should also be undertake accordingly (Samuelson, 2010). Internet has been taken into consideration for collection of data and the salaries which have been used in this analysis are of median salary data prevailing in the world in US$. The data are mentioned below
E. K. Hunt, R. F. (2008). Economics: An Introduction to Traditional and Progressive Views. New York: M.E. Sharpe.
Samuelson, P. A. (2010). Economics. Houston: Tata McGraw-Hill Education.
Wessels, W. J. (2006). Economics. London: Barron's Educational Series.