# Let’s say Sam just FInished high school and is deciding whether to enroll in a two year nursing program at the local community college.

1.Let’s say Sam just FInished high school and is deciding whether to enroll in a two year nursing program at the local community college. The cost of the program is \$10,000 per year for tuition and supplies. Because the program is so intensive, Sam cannot work if he enrolls in the program until after he graduates. Sam believes if he doesn’t enroll in the program, he’ll earn \$60,000 per year. He believes that if he completes the program, he’ll earn \$110,000 per year once he starts working. Because of visa issues, Sam is only allowed to stay in the country for 5 years (he will not work when he returns to his home country). Show your work.

(a) Set up what Sam’s net present value calculation should include. (b) At an interest rate of 3% (r=0.03), would you suggest that Sam enrolls in the program? (c) At an interest rate of 2%, would you suggest that Sam enrolls in the program? (d) What if Sam’s visa allowed him to stay for an extra year at the original 3% interest rate?

2. The Governor of Georgia wants your input on what he should do about Pre-K. He has asked the following questions. Answer them below to help inform his policy decision.

(a) What are the main dierences in the characteristics between programs like Perry pre-school/Abecedarian and State sponsored Head Start programs like the one in Georgia? (b) Because the eects of programs like Perry, in terms of IQ, fade out by middle school, shouldn’t we assume that the program won’t pass a benet-cost analysis? What evidence from previous studies can you provide to support or refute this claim? (c) Wouldn’t spending additional tax dollars on a worker training program give us a higher rate of return (value for our money) than investing in Pre-K since worker training programs are targeted to people already looking for work? Explain why or why not.