Consider a worker who is offered a salary bonus of $2,000 for each of the next two years if he or she enrolls in a job training program this year. The total cost to the worker, including any forgone earnings, is $3,000.
(1). What is the internal rate of return on this investment?
(2). Would this be a good investment for someone with a discount rate of 9%? Why?
Please show your solution process and explain.
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