Education & Skill Development: Education Cost-benefit Analysis

On average, individuals with a college degree will earn more over the course of their lifetimes than those with only a high school diploma.

• True

• False

There is little to no risk associated with investing money in professional education.

• True

• False

One of the factors to consider when calculating education costs is how much income you may sacrifice during the period you are attending school.

• True

• False

Which formula is used to perform a break-even analysis?

• a) Cost of Education ÷ (Expected Starting Pay – Current Annual Pay)

• b) (Expected Starting Pay – Current Annual Pay) ÷ Cost of Education

• c) Cost of Education ÷ Expected Starting Pay

• d) Cost of Education ÷ Current Annual Pay

The total cost of Lindsay’s graduate degree was $35,000. With this degree, she expects to earn an additional $10,000 per year. What is Lindsay’s break-even point?

• a) 1 year

• b) 1.5 years

• c) 2 years

• d) 3.5 years

The total cost of Jeremiah’s certificate program was $3,500. He expects to earn an additional $2,500 per year with the certificate. What is his break-even point?

• a) 6 months

• b) 9 months

• c) 1.4 years

• d) 2 years

Thinking in terms of financial gain, any kind of higher education choice is a good choice, because a degree or certification will always pay off in some way.

• True

• False

Arnold works at an entry-level post in a pharmaceutical company. He is now considering pursuing a course to help him move ahead in his company. Per his calculations, the total estimated cost of his education will be about $100,000, and the course would increase his lifetime earning potential from $1M to $1.1M. What is the lifetime ROI of his investment?

• a) 1%

• b) 10%

• c) 100%

• d) 1,000%