Friday, July 07, 2006

A 12 Month MBA- Worth it?
One of the discussion items in Microeconomics subject had a question
"Was the fact - 12 months length of the Queen’s MBA program an important factor in deciding to come here?"

The team asked to answer this came with up the below answer. The below information might help a prospective MBA student in making an informed decision.

"Yes, definitely".

Advantages we saw of a 12-month MBA over a 24-month MBA:
1. Shorter duration to learn everything you learn in 24 months.
2. Salary lost is only for 12 months not 24 months
3. Cost of living (accommodation, food, conveyance, phone calls etc.) is cheaper for 12 months
than 24 months.
4. Opportunity costs that are lost during 12 months are less than in a 24-month course as
seen in the graph ( Visit Link:

5. Net Present Value of the 12-month course is higher as you start earning your salary in a
year as compared to a 24-month course. This is seen in the calculations given below where
we see that the NPV of doing an MBA at the Rotman School of business is $104,576 less
than with a one-year program.

NPV of doing a one year MBA at Queen's
Costs associated with getting this MBA:
a. the tuition cost: 55,000 CAD
b. the opportunity cost of lost wages for 1 year.
Average Salary expected after graduation: $92,866 (FT report on avg sal)
Sal % increase = 94%
Therefore Avg sal prior to the MBA: $47, 869
Total Opportunity cost of studying this MBA: $95, 695
On an average MBAs work for 35 years and
NPV of the 1 yr MBA program= USD 641,144 Gain.!

NPV of doing a two year MBA
a. Opportunity cost of doing a 2 yr. MBA at Rotman from the information given above = $200 271
b. NPV USD 536,568 Gain!

6. Finally, since we (the students) come with substantial work experience, we are in a position to understand concepts faster and don’t require an academic-based 24-month program.

Another excellent article worth reading is "Theoretical study is the preperation for dealing with the unexpected".You can read this article here


At 7:27 PM, Blogger Archit Talwar said...

Can you please explain the calculations that have been done in the above explanation.

At 1:53 PM, Blogger aliya seen said...

Business Part includes everything that explains why you are doing what you have been asked to do sop for mba


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