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9 min read

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import React, { useState, useEffect } from 'react';
import { LineChart, Line, BarChart, Bar, XAxis, YAxis, CartesianGrid, Tooltip, Legend, ResponsiveContainer, PieChart, Pie, Cell } from 'recharts';
import { ArrowUpRight, DollarSign, TrendingUp, Calendar, Award, BookOpen } from 'lucide-react';

const MbaRoiCalculator = () => {
// State for form inputs
const [inputs, setInputs] = useState({
currentSalary: 80000,
schoolTuition: 150000,
livingExpenses: 60000,
scholarshipAmount: 20000,
programLengthYears: 2,
expectedSalaryIncrease: 70,
expectedBonusPercentage: 20,
industryGrowthRate: 5,
careerYearsToCalculate: 10,
region: 'northeast'
});

// State for calculation results
const [results, setResults] = useState({
totalCost: 0,
netCost: 0,
breakEvenYears: 0,
tenYearROI: 0,
lifetimeROI: 0,
fiveYearEarnings: 0,
tenYearEarnings: 0,
opportunityCost: 0,
yearByYearData: [],
regionMultiplier: 1,
paybackPeriod: 0,
irr: 0,
salaryData: []
});

// Regional adjustments
const regionMultipliers = {
northeast: 1.15,
midwest: 0.9,
south: 0.95,
west: 1.2,
international: 1.05
};

// Industry growth impact
const industryImpact = {
technology: 1.2,
finance: 1.15,
healthcare: 1.1,
manufacturing: 0.95,
consulting: 1.25
};

// Colors for charts
const COLORS = ['#0088FE', '#00C49F', '#FFBB28', '#FF8042', '#8884d8'];

// Update calculations when inputs change
useEffect(() => {
calculateROI();
}, [inputs]);

// Handle input changes
const handleInputChange = (e) => {
const { name, value } = e.target;
setInputs({
...inputs,
[name]: parseFloat(value) || 0
});
};

// Calculate ROI and other metrics
const calculateROI = () => {
const {
currentSalary,
schoolTuition,
livingExpenses,
scholarshipAmount,
programLengthYears,
expectedSalaryIncrease,
expectedBonusPercentage,
industryGrowthRate,
careerYearsToCalculate,
region
} = inputs;

// Calculate total cost
const grossCost = schoolTuition + (livingExpenses * programLengthYears);
const netCost = grossCost - scholarshipAmount;

// Calculate opportunity cost (lost salary during MBA)
const opportunityCost = currentSalary * programLengthYears;

// Total investment = direct costs + opportunity cost
const totalInvestment = netCost + opportunityCost;

// Calculate expected salary post-MBA
const regionMultiplier = regionMultipliers[region] || 1;
const postMbaSalary = currentSalary * (1 + (expectedSalaryIncrease / 100)) * regionMultiplier;

// Year-by-year projections
let yearByYearData = [];
let cumulativeCashFlow = -totalInvestment;
let breakEvenYear = 0;
let paybackPeriod = 0;

const salaryData = [];
let withMbaSalary = postMbaSalary;
let withoutMbaSalary = currentSalary;

for (let year = 1; year <= 20; year++) {
  // Account for industry growth and compounding
  const withMbaBonus = withMbaSalary * (expectedBonusPercentage / 100);
  const withoutMbaBonus = withoutMbaSalary * 0.05; // Assuming 5% bonus without MBA
  
  // Yearly cash flow is the difference in compensation packages
  const yearlyDifference = (withMbaSalary + withMbaBonus) - (withoutMbaSalary + withoutMbaBonus);
  
  // Cumulative cash flow
  cumulativeCashFlow += yearlyDifference;
  
  // Track when breakeven occurs (first time cumulative becomes positive)
  if (cumulativeCashFlow > 0 && breakEvenYear === 0) {
    breakEvenYear = year;
    
    // Calculate more precise payback period with fractional year
    const previousYearCF = cumulativeCashFlow - yearlyDifference;
    const fractionOfYear = Math.abs(previousYearCF) / yearlyDifference;
    paybackPeriod = (year - 1) + fractionOfYear;
  }
  
  // Store data for charts
  yearByYearData.push({
    year,
    yearlyDifference,
    cumulativeCashFlow,
    withMbaSalary,
    withoutMbaSalary
  });
  
  // Store salary comparison data
  if (year <= 10) {
    salaryData.push({
      year,
      'With MBA': withMbaSalary + withMbaBonus,
      'Without MBA': withoutMbaSalary + withoutMbaBonus
    });
  }
  
  // Increase salaries for next year based on growth rates
  withMbaSalary *= (1 + (industryGrowthRate / 100) * 1.2); // MBA grads get 1.2x industry growth
  withoutMbaSalary *= (1 + (industryGrowthRate / 100) * 0.8); // Non-MBA get 0.8x industry growth
}

// Calculate 10-year ROI = (10-year gains - investment) / investment
const tenYearGains = yearByYearData
  .filter(data => data.year <= 10)
  .reduce((sum, data) => sum + data.yearlyDifference, 0);

const tenYearROI = ((tenYearGains - totalInvestment) / totalInvestment) * 100;

// Calculate lifetime ROI (20 years)
const lifetimeGains = yearByYearData.reduce((sum, data) => sum + data.yearlyDifference, 0);
const lifetimeROI = ((lifetimeGains - totalInvestment) / totalInvestment) * 100;

// Calculate 5-year and 10-year earnings
const fiveYearEarnings = yearByYearData
  .filter(data => data.year <= 5)
  .reduce((sum, data) => sum + (data.withMbaSalary), 0);

const tenYearEarnings = yearByYearData
  .filter(data => data.year <= 10)
  .reduce((sum, data) => sum + (data.withMbaSalary), 0);

// Calculate simplified IRR (very simplified approximation)
// For a proper IRR, we'd need to solve for r in the NPV equation
const irr = (yearlyDifference / totalInvestment) * 100;

setResults({
  totalCost: grossCost,
  netCost,
  breakEvenYears: breakEvenYear,
  tenYearROI,
  lifetimeROI,
  fiveYearEarnings,
  tenYearEarnings,
  opportunityCost,
  yearByYearData,
  regionMultiplier,
  paybackPeriod,
  irr,
  salaryData
});

};

// Format currency values
const formatCurrency = (value) => {
return new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
maximumFractionDigits: 0
}).format(value);
};

// Format percentage values
const formatPercent = (value) => {
return new Intl.NumberFormat('en-US', {
style: 'percent',
minimumFractionDigits: 1,
maximumFractionDigits: 1
}).format(value / 100);
};

// Format years with one decimal place
const formatYears = (value) => {
return value.toFixed(1) + ' years';
};

// Payload formatting for tooltips
const customTooltip = ({ active, payload, label }) => {
if (active && payload && payload.length) {
return (


Year {label}


{payload.map((entry, index) => (
<p key={index} style={{ color: entry.color }}>
{entry.name}: {entry.name.includes('cumulative')
? formatCurrency(entry.value)
: formatCurrency(entry.value)}


))}

);
}
return null;
};

return (



MBA ROI Calculator


Evaluate the financial impact of your MBA investment


  <div className="grid grid-cols-1 md:grid-cols-2 gap-8">
    {/* Input Form */}
    <div className="bg-gray-50 p-6 rounded-lg">
      <h2 className="text-xl font-semibold mb-4 flex items-center">
        <BookOpen className="mr-2 h-5 w-5 text-blue-500" />
        Input Parameters
      </h2>

      <div className="space-y-4">
        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Current Annual Salary (Pre-MBA)
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <DollarSign className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="currentSalary"
              value={inputs.currentSalary}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Total Tuition Cost
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <DollarSign className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="schoolTuition"
              value={inputs.schoolTuition}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Annual Living Expenses
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <DollarSign className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="livingExpenses"
              value={inputs.livingExpenses}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Scholarship Amount
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <DollarSign className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="scholarshipAmount"
              value={inputs.scholarshipAmount}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Program Length (Years)
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <Calendar className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="programLengthYears"
              min="1"
              max="3"
              step="0.5"
              value={inputs.programLengthYears}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Expected Salary Increase (%)
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <TrendingUp className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="expectedSalaryIncrease"
              value={inputs.expectedSalaryIncrease}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Expected Bonus (% of Salary)
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <Award className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="expectedBonusPercentage"
              value={inputs.expectedBonusPercentage}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Industry Annual Growth Rate (%)
          </label>
          <div className="relative">
            <span className="absolute inset-y-0 left-0 flex items-center pl-3 text-gray-500">
              <TrendingUp className="h-4 w-4" />
            </span>
            <input
              type="number"
              name="industryGrowthRate"
              value={inputs.industryGrowthRate}
              onChange={handleInputChange}
              className="pl-10 w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
            />
          </div>
        </div>

        <div>
          <label className="block text-sm font-medium text-gray-700 mb-1">
            Region
          </label>
          <select
            name="region"
            value={inputs.region}
            onChange={handleInputChange}
            className="w-full p-2 border border-gray-300 rounded focus:ring-blue-500 focus:border-blue-500"
          >
            <option value="northeast">Northeast US</option>
            <option value="midwest">Midwest US</option>
            <option value="south">Southern US</option>
            <option value="west">Western US</option>
            <option value="international">International</option>
          </select>
        </div>
      </div>
    </div>

    {/* Results Section */}
    <div>
      <h2 className="text-xl font-semibold mb-4 flex items-center">
        <ArrowUpRight className="mr-2 h-5 w-5 text-green-500" />
        ROI Analysis Results
      </h2>

      <div className="bg-gradient-to-r from-blue-50 to-indigo-50 p-4 rounded-lg mb-6">
        <div className="grid grid-cols-2 gap-4">
          <div className="bg-white p-3 rounded shadow">
            <div className="text-sm text-gray-500">Net Investment</div>
            <div className="text-xl font-bold text-blue-800">{formatCurrency(results.netCost + results.opportunityCost)}</div>
          </div>
          <div className="bg-white p-3 rounded shadow">
            <div className="text-sm text-gray-500">Payback Period</div>
            <div className="text-xl font-bold text-blue-800">{formatYears(results.paybackPeriod)}</div>
          </div>
          <div className="bg-white p-3 rounded shadow">
            <div className="text-sm text-gray-500">10-Year ROI</div>
            <div className="text-xl font-bold text-green-700">{formatPercent(results.tenYearROI)}</div>
          </div>
          <div className="bg-white p-3 rounded shadow">
            <div className="text-sm text-gray-500">Lifetime ROI</div>
            <div className="text-xl font-bold text-green-700">{formatPercent(results.lifetimeROI)}</div>
          </div>
        </div>
      </div>

      <div className="space-y-6">
        {/* Cost Breakdown */}
        <div>
          <h3 className="text-lg font-medium mb-2">Cost Breakdown</h3>
          <div className="bg-white p-4 rounded shadow">
            <ResponsiveContainer width="100%" height={200}>
              <PieChart>
                <Pie
                  data={[
                    { name: 'Tuition', value: inputs.schoolTuition },
                    { name: 'Living Expenses', value: inputs.livingExpenses * inputs.programLengthYears },
                    { name: 'Opportunity Cost', value: results.opportunityCost }
                  ]}
                  cx="50%"
                  cy="50%"
                  outerRadius={80}
                  fill="#8884d8"
                  dataKey="value"
                  label={({ name, percent }) => `${name}: ${(percent * 100).toFixed(0)}%`}
                >
                  {[0, 1, 2].map((entry, index) => (
                    <Cell key={`cell-${index}`} fill={COLORS[index % COLORS.length]} />
                  ))}
                </Pie>
                <Tooltip formatter={(value) => formatCurrency(value)} />
              </PieChart>
            </ResponsiveContainer>
          </div>
        </div>

        {/* Salary Comparison */}
        <div>
          <h3 className="text-lg font-medium mb-2">Salary Comparison (10 Years)</h3>
          <div className="bg-white p-4 rounded shadow">
            <ResponsiveContainer width="100%" height={200}>
              <BarChart
                data={results.salaryData}
                margin={{ top: 5, right: 5, left: 5, bottom: 5 }}
              >
                <CartesianGrid strokeDasharray="3 3" />
                <XAxis dataKey="year" label={{ value: 'Years After MBA', position: 'insideBottom', offset: -5 }} />
                <YAxis tickFormatter={(value) => `$${(value / 1000).toFixed(0)}k`} />
                <Tooltip formatter={(value) => formatCurrency(value)} />
                <Legend />
                <Bar dataKey="With MBA" fill="#0088FE" />
                <Bar dataKey="Without MBA" fill="#00C49F" />
              </BarChart>
            </ResponsiveContainer>
          </div>
        </div>

        {/* Cumulative Returns */}
        <div>
          <h3 className="text-lg font-medium mb-2">Cumulative Returns</h3>
          <div className="bg-white p-4 rounded shadow">
            <ResponsiveContainer width="100%" height={200}>
              <LineChart
                data={results.yearByYearData.filter(data => data.year <= 10)}
                margin={{ top: 5, right: 5, left: 5, bottom: 5 }}
              >
                <CartesianGrid strokeDasharray="3 3" />
                <XAxis dataKey="year" />
                <YAxis tickFormatter={(value) => `$${(value / 1000).toFixed(0)}k`} />
                <Tooltip content={customTooltip} />
                <Legend />
                <Line
                  type="monotone"
                  dataKey="cumulativeCashFlow"
                  name="Cumulative Return"
                  stroke="#8884d8"
                  activeDot={{ r: 8 }}
                  strokeWidth={2}
                />
              </LineChart>
            </ResponsiveContainer>
          </div>
        </div>
      </div>
    </div>
  </div>

  <div className="mt-8 bg-blue-50 p-4 rounded-lg">
    <h3 className="text-lg font-semibold mb-2">Key Insights</h3>
    <ul className="space-y-2">
      <li className="flex items-start">
        <span className="text-blue-500 mr-2">•</span>
        <span>Your MBA investment is projected to pay for itself in <strong>{formatYears(results.paybackPeriod)}</strong></span>
      </li>
      <li className="flex items-start">
        <span className="text-blue-500 mr-2">•</span>
        <span>Your 10-year ROI of <strong>{formatPercent(results.tenYearROI)}</strong> represents a solid financial return</span>
      </li>
      <li className="flex items-start">
        <span className="text-blue-500 mr-2">•</span>
        <span>Regional adjustment factor of <strong>{results.regionMultiplier.toFixed(2)}x</strong> accounts for location-based salary differences</span>
      </li>
      <li className="flex items-start">
        <span className="text-blue-500 mr-2">•</span>
        <span>Your total 10-year additional earnings from the MBA: <strong>{formatCurrency(results.tenYearEarnings - (results.opportunityCost + (inputs.currentSalary * 10)))}</strong></span>
      </li>
    </ul>
  </div>

  <div className="mt-4 text-center text-sm text-gray-500">
    <p>This calculator provides estimates based on the information you provide. Actual returns may vary.</p>
  </div>
</div>

);
};

export default MbaRoiCalculator;

Published by:

Daniel Tran

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