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compare the present value of both decisions

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Marlene will live for four more time periods. In the current period, she has the option of attending college. If she does, she pays 40,000 in direct costs for the period and gives up 50,000 in earnings (what she earns for each period if she does not attend college). She knows that after college she will work get paid 70,000 in period 2, $90,000 in period 3, and $110,000 in period 4. If her discount rate is 10%, would she attend college?

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Hello!
In order to decide whether Marlene should attend college, we must compare the present value of both decisions.

- Don't Attend College
In this case, Marlene will receive $50,000 this period and $50,000 in each of the next 3 ...

Solution Summary

This posting compares the present value of both decisions.

$2.19
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Wal-Mart: Solution-Oriented Decision Models

Select a real company (not a retailer). Identify 4 decisions that the company makes at different levels of the organization. Describe the policies, procedures and decision-making tools that might be used to make each of the four decisions. In each case, explain why the decision-making methodology would be appropriate to this specific company's strategy.
For example, Wal-Mart makes decisions about:
a) where to locate new stores;
b) which additional businesses to include in its stores (travel agent, bank, optician, etc.);
c) specific products to discontinue selling;
d) who to hire (and fire);
e) how many cash registers to have open at any given time;
f) accepting a specific item for customer return (for example, an article of clothing that appears to have been worn).

Who would make these decisions? What criteria would they use? How might the criteria have been established? Would they use any kind of quantitative analysis? If so, which specific quantitative methods might be appropriate? How much discretion would the decision-makers have? Who would review or evaluate their decisions?

The process must - at some point - identify some alternatives (no less than 2, and no more than 6) and a way of choosing just ONE of them.

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