Two people quit work and begin college at the same time. their salary and education information is given in the table below. salary prior to school years attending college total cost of college salary upon graduating person a $18,000 3 $45000 $33,000 person b $27,000 4 $30,000 $37,000 choose the true statement. a. person a recovers their investment in a shorter amount of time. b. person b recovers their investment in a shorter amount of time. c. they recover their investments in the same amount of time. d. there is too little information to compare the time to recover their investments.

Investment decisions often involve a rate of return. Here, considering the cost of money or return on investment would complicate the problem significantly. We choose to look at it considering only opportunity cost and the time required to repay that cost.

Person A loses 18,000 of income for each of the 3 years they spend in college. In addition, they incur costs of 45,000, for a total opportunity cost of

... 18,000×3 + 45,000 = 99,000

After graduation, Person A has a salary increase of 15,000 per year, so recovers the 99,000 cost in 6.6 years.

Person B loses 27,000 of income for each of the 4 years they spend in college. In addition, they incur costs of 30,000, for a total opportunity cost of

... 27,000×4 + 30,000 = 138,000

After graduation, person B has a salary increase of 10,000 per year, so recovers the 138,000 cost in 13.8 years.

The appropriate answer seems to be ...

... a. Person A recovers their investment in a shorter amount of time.

A

Step-by-step explanation:

step-by-step explanation:

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