It will be rational for an individual to pursue an MBA degree when the net present value (NPV) is positive.
In order for the individual to know if tp pursue the degree, the net present value should be calculated and when it's positive, then the degree should be pursued.
In a situation where the NPV is negative, the degree should not be pursued. When the starting salaries of managers with MBA degrees remained constant but salaries of managers without such degrees decreased by 20 percent, the number of applicants for the MBA degree will increase.
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