Both Phoebe and Connor are trying to maximize their lifetime income. Each has a different plan on how to do it best. Phoebe clai
ms that she wants a career with no college or trade school requirements because she could save the money for retirement rather than spending it on education. She estimates her average yearly salary at $35,000 a year with no post-secondary education requirements. Connor claims post-secondary education will help him get a career with a higher salary and more benefits he can use in retirement so the education costs will more than pay for themselves. Connor estimates his average yearly salary at $60,000 after earning a college degree. Which statement about their claims is correct?
A. Phoebe is correct because a college education is overly expensive and is almost a waste of money.
B. Phoebe is correct because she might save $60,000 for not attending college and $140,000 by earning money while others are in college. The college graduates would never be able to make up that difference in earnings.
C. Connor is correct because he is likely to earn a higher salary throughout his career. By earning by only $11,000 more in salary, he could make up the difference over the life of his career. He is also likely to have more employee benefits to save for his retirement.
D.Connor is correct because a person without a college degree will never be able to support himself.
The correct answer is C. By attending college, Connor actually stands better prospects to earn a significant salary throughout his lifetime. Employees having gone through post-secondary education generally earn more income than those who have not studied till college. The simple reason is, by attending college, you acquire sharper knowledge and insights of disciplines you wouldn't otherwise have access to. You get skills that are in line with a demanding and fast-paced environment. People often regret not attending college because they could have grabbed a certificate that could have been a stepping stone for professional opportunities and higher incomes.
I will prefer to know the OPERATING INCOME. Operating income refers to the operating profits of a company before the taxes and interests are removed. It reflects the true situation of the company and can be used to analyse if a company is making profits from its manufacturing process or not. The net income of a company has some expenses and costs that do not reflect the core operations of the company.
The issue of the bond at $200,000 face value would be a cash inflow under the financing activities of the cash flow when issued since more cash was received from the bondholders.
However,the payment of bond interest of $10,000 yearly is a cash outflow under the financing activities section of the statement of cash flows,since Norton Corporation would be parting with the amount on yearly basis till the bonds are retired.
