A high school graduate has to decide between working and going to college. If he works, he
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Calculating the rate of return for each case is straightforward in Excel by using the IRR function.
(a) Each year of college still costs $15,000 and each year of post-college work still pays $60,000, but each year of non-college work now pays $40,000.
(b) Each year of college still costs $15,000 and each year of non-college work still pays $35,000, but each year of post-college work now pays $80,000.
(c) Each year of non-college work and post-college work still pays $35,000 and $60,000 respectively, but now each year of college costs $35,000.
(d) Each year of college still costs $15,000. The first year of non-college work pays $35,000 but then increases by 3 percent each year thereafter. The first year of post-college work pays $60,000 but then increases by 5 percent each year thereafter.
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