Financial Feasibility of 1 year MBA

Input Metrics Output metrics

Loan Taken (Yes/No) No Average CTC Post 1 year MBA
Cost of Program Fee (INR lacs) (INR lacs) 30 Monthly payment
Incoming CTC Pre 1 year MBA (INR lacs) 20 Number of payments
Increase in CTC in Campus Placement 50% Total interest
Annual Salary Increment 10% Total cost of loan
Interest Rate on SBI Loan 8% IRR (excluding Terminal Value)
Tenure of Loan (in years) 8
Marginal Rate of Tax for Section 80E Deduction 30%
Average Tax Rate on Salary 25%

Loan Taken 3%
Yes 27%
No 3%
Loan Taken No
IRR (Year 1 - 10) % 0 Increase in Salary in Campus Placement
3% 10% 20% 30% 40% 50%
Subsequent Annual Salary 5% -8.8% -2.4%
Growth 10% -10.2% -2.6% 3.3%
15% -193.7% -4.3% 2.8% 8.4%
20% -8.4% 0.9% 7.6% 13.1%
25% -3.3% 5.6% 12.2% 17.5%
30% 1.4% 10.0% 16.5% 21.8%
35% -8.35% 5.7% 14.2% 20.6% 25.9%
40% -3.89% 9.7% 18.2% 24.6% 29.9%
45% 0.23% 13.6% 22.0% 28.4% 33.7%
48% 2.19% 15.5% 23.9% 30.3% 35.6%
50% 4.10% 17.4% 25.8% 32.2% 37.5%
year MBA

-by Anurag Singal

TC Post 1 year MBA (INR lacs) 30

(INR '000) 46
96
(INR lacs) 12
(INR lacs) 44
ing Terminal Value) 3%

n Salary in Campus Placement

60% 70% 80% 90% 100%
2.8% 7.3% 11.3% 15.0% 18.4%
8.2% 12.5% 16.4% 19.9% 23.2%
13.1% 17.3% 21.1% 24.6% 27.8%
17.8% 21.9% 25.6% 29.1% 32.3%
22.1% 26.2% 29.9% 33.4% 36.6%
26.4% 30.4% 34.1% 37.6% 40.7%
30.5% 34.5% 38.2% 41.6% 44.8%
34.4% 38.5% 42.2% 45.6% 48.8%
38.3% 42.4% 46.1% 49.6% 52.8%
40.2% 44.3% 48.1% 51.5% 54.7%
42.1% 46.2% 50.0% 53.4% 56.6%
 0

Financial Feasibility of 1 year MB

Years 1-10 0 1 2
Fees paid for 1 year MBA -3,000,000 -3,000,000
Opportunity Cost : Post Tax Salary for 1
year ( 20 lacs * (1-Tax Rate)) -1,500,000 -1,500,000
Living Expenses for 1 Year -150,000 -150,000
Loan Related Calculations:
Collateral Free Loan from SBI 0 0
EMI Paid -4,351,270 -549,634
Tax Saving on Interest u/s 80E 0 -
Salary Related Calculations:
Incremental Salary Post One Year MBA 13,579,477 1,000,000
Less Taxes on Incremental Salary -3,394,869 -250,000
-3,000,000 -1,650,000 200,366

IRR excluding Terminal Value ( i.e. beyond 3.27%

10 years post 1 year MBA)
ncial Feasibility of 1 year MBA

-by Anurag Singal

3 4 5 6 7 8 9 10

-549,634 -549,634 -549,634 -549,634 -549,634 -549,634 -503,831

- - - - - - -

1,100,000 1,210,000 1,331,000 1,464,100 1,610,510 1,771,561 1,948,717 2,143,589

-275,000 -302,500 -332,750 -366,025 -402,628 -442,890 -487,179 -535,897
275,366 357,866 448,616 548,441 658,248 779,037 957,707 1,607,692
 Loan Values Loan Summary
Loan Amt on course completion ₹ 3,240,000 Monthly payment 45,803
Annual interest rate 8% Number of payments 96

Loan period in years 8 Total interest ₹ 1,157,073

Start date of loan Monday, April 04, 2022 Total cost of loan ₹ 4,397,073

Pmt No. Payment Date Beginning Balance Payment Principal Interest Ending Balance

1 5/4/2022 ₹ 3,240,000 ₹ 45,803 ₹ 24,203 ₹ 21,600 ₹ 3,215,797

2 6/4/2022 ₹ 3,215,797 ₹ 45,803 ₹ 24,364 ₹ 21,439 ₹ 3,191,433
3 7/4/2022 ₹ 3,191,433 ₹ 45,803 ₹ 24,527 ₹ 21,276 ₹ 3,166,906
4 8/4/2022 ₹ 3,166,906 ₹ 45,803 ₹ 24,690 ₹ 21,113 ₹ 3,142,216
5 9/4/2022 ₹ 3,142,216 ₹ 45,803 ₹ 24,855 ₹ 20,948 ₹ 3,117,361
6 10/4/2022 ₹ 3,117,361 ₹ 45,803 ₹ 25,020 ₹ 20,782 ₹ 3,092,341
7 11/4/2022 ₹ 3,092,341 ₹ 45,803 ₹ 25,187 ₹ 20,616 ₹ 3,067,154
8 12/4/2022 ₹ 3,067,154 ₹ 45,803 ₹ 25,355 ₹ 20,448 ₹ 3,041,799
9 1/4/2023 ₹ 3,041,799 ₹ 45,803 ₹ 25,524 ₹ 20,279 ₹ 3,016,274
10 2/4/2023 ₹ 3,016,274 ₹ 45,803 ₹ 25,694 ₹ 20,108 ₹ 2,990,580
11 3/4/2023 ₹ 2,990,580 ₹ 45,803 ₹ 25,866 ₹ 19,937 ₹ 2,964,715
12 4/4/2023 ₹ 2,964,715 ₹ 45,803 ₹ 26,038 ₹ 19,765 ₹ 2,938,676
13 5/4/2023 ₹ 2,938,676 ₹ 45,803 ₹ 26,212 ₹ 19,591 ₹ 2,912,465
14 6/4/2023 ₹ 2,912,465 ₹ 45,803 ₹ 26,386 ₹ 19,416 ₹ 2,886,078
15 7/4/2023 ₹ 2,886,078 ₹ 45,803 ₹ 26,562 ₹ 19,241 ₹ 2,859,516
16 8/4/2023 ₹ 2,859,516 ₹ 45,803 ₹ 26,739 ₹ 19,063 ₹ 2,832,777
17 9/4/2023 ₹ 2,832,777 ₹ 45,803 ₹ 26,918 ₹ 18,885 ₹ 2,805,859
18 10/4/2023 ₹ 2,805,859 ₹ 45,803 ₹ 27,097 ₹ 18,706 ₹ 2,778,762
19 11/4/2023 ₹ 2,778,762 ₹ 45,803 ₹ 27,278 ₹ 18,525 ₹ 2,751,484
20 12/4/2023 ₹ 2,751,484 ₹ 45,803 ₹ 27,460 ₹ 18,343 ₹ 2,724,024
21 1/4/2024 ₹ 2,724,024 ₹ 45,803 ₹ 27,643 ₹ 18,160 ₹ 2,696,382
22 2/4/2024 ₹ 2,696,382 ₹ 45,803 ₹ 27,827 ₹ 17,976 ₹ 2,668,555
23 3/4/2024 ₹ 2,668,555 ₹ 45,803 ₹ 28,012 ₹ 17,790 ₹ 2,640,542
24 4/4/2024 ₹ 2,640,542 ₹ 45,803 ₹ 28,199 ₹ 17,604 ₹ 2,612,343
25 5/4/2024 ₹ 2,612,343 ₹ 45,803 ₹ 28,387 ₹ 17,416 ₹ 2,583,956
26 6/4/2024 ₹ 2,583,956 ₹ 45,803 ₹ 28,576 ₹ 17,226 ₹ 2,555,379
27 7/4/2024 ₹ 2,555,379 ₹ 45,803 ₹ 28,767 ₹ 17,036 ₹ 2,526,612
28 8/4/2024 ₹ 2,526,612 ₹ 45,803 ₹ 28,959 ₹ 16,844 ₹ 2,497,654
29 9/4/2024 ₹ 2,497,654 ₹ 45,803 ₹ 29,152 ₹ 16,651 ₹ 2,468,502
30 10/4/2024 ₹ 2,468,502 ₹ 45,803 ₹ 29,346 ₹ 16,457 ₹ 2,439,156
31 11/4/2024 ₹ 2,439,156 ₹ 45,803 ₹ 29,542 ₹ 16,261 ₹ 2,409,614
32 12/4/2024 ₹ 2,409,614 ₹ 45,803 ₹ 29,739 ₹ 16,064 ₹ 2,379,875
33 1/4/2025 ₹ 2,379,875 ₹ 45,803 ₹ 29,937 ₹ 15,866 ₹ 2,349,938
34 2/4/2025 ₹ 2,349,938 ₹ 45,803 ₹ 30,137 ₹ 15,666 ₹ 2,319,802
35 3/4/2025 ₹ 2,319,802 ₹ 45,803 ₹ 30,337 ₹ 15,465 ₹ 2,289,464
36 4/4/2025 ₹ 2,289,464 ₹ 45,803 ₹ 30,540 ₹ 15,263 ₹ 2,258,924
37 5/4/2025 ₹ 2,258,924 ₹ 45,803 ₹ 30,743 ₹ 15,059 ₹ 2,228,181
38 6/4/2025 ₹ 2,228,181 ₹ 45,803 ₹ 30,948 ₹ 14,855 ₹ 2,197,233
39 7/4/2025 ₹ 2,197,233 ₹ 45,803 ₹ 31,155 ₹ 14,648 ₹ 2,166,078
40 8/4/2025 ₹ 2,166,078 ₹ 45,803 ₹ 31,362 ₹ 14,441 ₹ 2,134,716

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Pmt No. Payment Date Beginning Balance Payment Principal Interest Ending Balance

41 9/4/2025 ₹ 2,134,716 ₹ 45,803 ₹ 31,571 ₹ 14,231 ₹ 2,103,144

42 10/4/2025 ₹ 2,103,144 ₹ 45,803 ₹ 31,782 ₹ 14,021 ₹ 2,071,362
43 11/4/2025 ₹ 2,071,362 ₹ 45,803 ₹ 31,994 ₹ 13,809 ₹ 2,039,369
44 12/4/2025 ₹ 2,039,369 ₹ 45,803 ₹ 32,207 ₹ 13,596 ₹ 2,007,162
45 1/4/2026 ₹ 2,007,162 ₹ 45,803 ₹ 32,422 ₹ 13,381 ₹ 1,974,740
46 2/4/2026 ₹ 1,974,740 ₹ 45,803 ₹ 32,638 ₹ 13,165 ₹ 1,942,102
47 3/4/2026 ₹ 1,942,102 ₹ 45,803 ₹ 32,855 ₹ 12,947 ₹ 1,909,247
48 4/4/2026 ₹ 1,909,247 ₹ 45,803 ₹ 33,075 ₹ 12,728 ₹ 1,876,172
49 5/4/2026 ₹ 1,876,172 ₹ 45,803 ₹ 33,295 ₹ 12,508 ₹ 1,842,877
50 6/4/2026 ₹ 1,842,877 ₹ 45,803 ₹ 33,517 ₹ 12,286 ₹ 1,809,360
51 7/4/2026 ₹ 1,809,360 ₹ 45,803 ₹ 33,740 ₹ 12,062 ₹ 1,775,620
52 8/4/2026 ₹ 1,775,620 ₹ 45,803 ₹ 33,965 ₹ 11,837 ₹ 1,741,654
53 9/4/2026 ₹ 1,741,654 ₹ 45,803 ₹ 34,192 ₹ 11,611 ₹ 1,707,462
54 10/4/2026 ₹ 1,707,462 ₹ 45,803 ₹ 34,420 ₹ 11,383 ₹ 1,673,043
55 11/4/2026 ₹ 1,673,043 ₹ 45,803 ₹ 34,649 ₹ 11,154 ₹ 1,638,393
56 12/4/2026 ₹ 1,638,393 ₹ 45,803 ₹ 34,880 ₹ 10,923 ₹ 1,603,513
57 1/4/2027 ₹ 1,603,513 ₹ 45,803 ₹ 35,113 ₹ 10,690 ₹ 1,568,400
58 2/4/2027 ₹ 1,568,400 ₹ 45,803 ₹ 35,347 ₹ 10,456 ₹ 1,533,054
59 3/4/2027 ₹ 1,533,054 ₹ 45,803 ₹ 35,582 ₹ 10,220 ₹ 1,497,471
60 4/4/2027 ₹ 1,497,471 ₹ 45,803 ₹ 35,820 ₹ 9,983 ₹ 1,461,651
61 5/4/2027 ₹ 1,461,651 ₹ 45,803 ₹ 36,058 ₹ 9,744 ₹ 1,425,593
62 6/4/2027 ₹ 1,425,593 ₹ 45,803 ₹ 36,299 ₹ 9,504 ₹ 1,389,294
63 7/4/2027 ₹ 1,389,294 ₹ 45,803 ₹ 36,541 ₹ 9,262 ₹ 1,352,753
64 8/4/2027 ₹ 1,352,753 ₹ 45,803 ₹ 36,784 ₹ 9,018 ₹ 1,315,969
65 9/4/2027 ₹ 1,315,969 ₹ 45,803 ₹ 37,030 ₹ 8,773 ₹ 1,278,939
66 10/4/2027 ₹ 1,278,939 ₹ 45,803 ₹ 37,277 ₹ 8,526 ₹ 1,241,662
67 11/4/2027 ₹ 1,241,662 ₹ 45,803 ₹ 37,525 ₹ 8,278 ₹ 1,204,137
68 12/4/2027 ₹ 1,204,137 ₹ 45,803 ₹ 37,775 ₹ 8,028 ₹ 1,166,362
69 1/4/2028 ₹ 1,166,362 ₹ 45,803 ₹ 38,027 ₹ 7,776 ₹ 1,128,335
70 2/4/2028 ₹ 1,128,335 ₹ 45,803 ₹ 38,281 ₹ 7,522 ₹ 1,090,054
71 3/4/2028 ₹ 1,090,054 ₹ 45,803 ₹ 38,536 ₹ 7,267 ₹ 1,051,518
72 4/4/2028 ₹ 1,051,518 ₹ 45,803 ₹ 38,793 ₹ 7,010 ₹ 1,012,726
73 5/4/2028 ₹ 1,012,726 ₹ 45,803 ₹ 39,051 ₹ 6,752 ₹ 973,674
74 6/4/2028 ₹ 973,674 ₹ 45,803 ₹ 39,312 ₹ 6,491 ₹ 934,363
75 7/4/2028 ₹ 934,363 ₹ 45,803 ₹ 39,574 ₹ 6,229 ₹ 894,789
76 8/4/2028 ₹ 894,789 ₹ 45,803 ₹ 39,838 ₹ 5,965 ₹ 854,951
77 9/4/2028 ₹ 854,951 ₹ 45,803 ₹ 40,103 ₹ 5,700 ₹ 814,848
78 10/4/2028 ₹ 814,848 ₹ 45,803 ₹ 40,371 ₹ 5,432 ₹ 774,478
79 11/4/2028 ₹ 774,478 ₹ 45,803 ₹ 40,640 ₹ 5,163 ₹ 733,838
80 12/4/2028 ₹ 733,838 ₹ 45,803 ₹ 40,911 ₹ 4,892 ₹ 692,927
81 1/4/2029 ₹ 692,927 ₹ 45,803 ₹ 41,183 ₹ 4,620 ₹ 651,744
82 2/4/2029 ₹ 651,744 ₹ 45,803 ₹ 41,458 ₹ 4,345 ₹ 610,286
83 3/4/2029 ₹ 610,286 ₹ 45,803 ₹ 41,734 ₹ 4,069 ₹ 568,552
84 4/4/2029 ₹ 568,552 ₹ 45,803 ₹ 42,012 ₹ 3,790 ₹ 526,539
85 5/4/2029 ₹ 526,539 ₹ 45,803 ₹ 42,293 ₹ 3,510 ₹ 484,247
86 6/4/2029 ₹ 484,247 ₹ 45,803 ₹ 42,575 ₹ 3,228 ₹ 441,672

Page 6 of 7
Pmt No. Payment Date Beginning Balance Payment Principal Interest Ending Balance

87 7/4/2029 ₹ 441,672 ₹ 45,803 ₹ 42,858 ₹ 2,944 ₹ 398,814

88 8/4/2029 ₹ 398,814 ₹ 45,803 ₹ 43,144 ₹ 2,659 ₹ 355,670
89 9/4/2029 ₹ 355,670 ₹ 45,803 ₹ 43,432 ₹ 2,371 ₹ 312,238
90 10/4/2029 ₹ 312,238 ₹ 45,803 ₹ 43,721 ₹ 2,082 ₹ 268,517
91 11/4/2029 ₹ 268,517 ₹ 45,803 ₹ 44,013 ₹ 1,790 ₹ 224,504
92 12/4/2029 ₹ 224,504 ₹ 45,803 ₹ 44,306 ₹ 1,497 ₹ 180,198
93 1/4/2030 ₹ 180,198 ₹ 45,803 ₹ 44,602 ₹ 1,201 ₹ 135,597
94 2/4/2030 ₹ 135,597 ₹ 45,803 ₹ 44,899 ₹ 904 ₹ 90,698
95 3/4/2030 ₹ 90,698 ₹ 45,803 ₹ 45,198 ₹ 605 ₹ 45,500
96 4/4/2030 ₹ 45,500 ₹ 45,803 ₹ 45,500 ₹ 303 ₹0

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