Question #2: Return on Advanced Training

It is January 1st, 2020, Joan just turned 24-years-old and recently finished her undergraduate degree. Since finishing, she has been working as a bookkeeper. She is paid on a semi-annual frequency (this assumption may be unrealistic but is made to keep things relatively simple). Her most recent paycheck, in December 2019, was for $20,000 and will grow at a real rate of 1.25% per semi-annum. She also has no chance of promotion with her current level of education and is certain that she will retire on her 66th birthday. She is considering enrolling in an MBA that requires her to stop working for 2 years (start date of September 1st, 2020) and to pay tuition of $19,000 semi-annually. The benefit of this (investment) is that if (when) she graduates, her employer will offer her a management position where her starting compensation would equal 2 times the salary she was earning at her previous position (i.e. 2 times the semi-annual salary she was earning the day she started her MBA). Moreover, wages for the management position grow at 2.5% semi-annually (real rate).

Part A: What is the Internal Rate of Return (IRR) from this investment in education? Please state very clearly, and briefly explain if necessary, any-and-all assumptions you must make to come up with an answer to this question. For example: I assumed that she worked her old job until September 1st, 2020. Any implicit assumption that you make that is not explained will result in a loss of points.