You are 30 years old today and you are considering studying an MBA. You just received your annual salary of $50,000 and you expect it to grow 3% per year. MBAs typically earn $60,000 upon graduation, with salaries increasing 4% per year. The MBA program you are considering is a 2-year full-time program that costs $30,000 per year, payable at the end of each year of study. He wants to retire on his 65th birthday. The corresponding discount rate is 8%. What is the internal rate of return of the MBA?

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solution The internal rate of return IRR is the annual rate of growth that an investment is expected ... View the full answer