3. (10 marks) Consider an eighteen-yearold high school student that is about to graduate. She lives for two periods. If she decides to attend university, she has zero earnings in Period 1 and she earns $1,200,000 in Period 2. However, if she decides NOT to attend university, she earns $500,0000 in Period 1 and $550,000 in Period 2. Suppose university is free (i.e. no tuition) and the discount rate is 0.05 to discount the earnings in Period 2. a) Should she attend university? Show your work. b) Based on the information above, what is the internal rate of return