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Assignment on internal rate of return

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Reference no: EM133077445

Internal Rate of Return (IRR)

Suppose you are considering switching fields from public health and find the following salary schedule:

 

Year 0

Year 1

Year 2

Public Health Professional

-5

5

5

Butler

1

1

1

Write down (but do not solve) the equation(s) to find the internal rate of return of becoming a butler as opposed to a public health professional.  You may use two equations to avoid tedious substitution if you prefer.

After some algebra you find the IRR to be 22%.  After some soul searching you find your own interest rate is 20%.  Which profession do you choose and why?  (Assume both professions provide equal job satisfaction and ignore sunk costs such as studying for the exam you are currently taking.)

Reference no: EM133077445

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