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Nope -- you have to discount the future earnings as well as the $40,000. In your calculation, you are still forgetting that a $1500 bonus paid in 20 years has a lower PDV than a $1500 bonus paid next year. You want to solve (b/(1+r))*40,000=sum from t=5 to retirement {(b/(1+r))^t*W}, where W is the increase in future salary due to getting a master's, and b is the discount rate. The summation starts at t=5 because because it takes approximately 5 years to finish a PhD.
As an aside, to be strictly correct, you'd want E[Wt] -- the expected future bonus at time t, since as discussed, higher wages are likely but not guaranteed. Therefore, the probabilities should also be part of the calculation.
I'm not disputing that it's possible -- even probable -- for there to be some return to schooling that makes the MA economically worthwhile. I was just pointing out that there is a cost beyond tuition. (And now I'm pointing out that you have to discount the whole earnings stream, not just the foregone salary.)
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