$(20$ points$)$ Calculating rate of return. U$.$S$.$ Census Bureau statistics show that the annual earnings for

persons with a high school diploma are $$35,220$ versus $$57,925$ for someone with a bachelor's degree.

If the cost of attending college is assumed to be $$35,000$ per year for $4$ years and the forgone earnings

during those years are assumed to be $$35,220$ per year, what rate of return does earning a bachelor's

degree represent? Use a $25-$year study period.

In your analysis, you are expected to:

$($a$)$ Use a spreadsheet to display the cash flow,

$($b$)$ draw a Cash Flow Diagram, and

$($c$)$ use a spreadsheet to compute the internal rate of return of the CFD$.($Hint: The investment in

years $1$ through $4$ is the cost of college plus the foregone earnings, and the income in years $5$

through $25$ is the difference in income between a high school diploma and a bachelor's degree.$)$

Method: Spreadsheet. You can draw the cash flow diagram $($neatly$)$ by hand if you like, although it

would be to your benefit to learn how to use software to create such a diagram.