Computing the internal rate of return to investment

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Sally is offered a salary bonus of $2,000 for each of the next two years if she enrolls in a job training program this year. The total cost to Sally including any forgone earnings is $3,500.

  • What is the internal rate of return to this investment?
  • Would this be a good investment for someone with a discount rate of 6%?
  • What is the highest discount rate a person could have and still find this investment attractive?
  • Is it possible for a person to have a higher discount rate than the market interest rate?
  • If Sally were more present-oriented, would she be more or less likely to obtain the training?

Reference no: EM131085979

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