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(20 marks) Consider a savings accounts model. At time t=0, you invest $30,000 in RBC bank. RBC provides 12% return in ye
Posted: Wed Mar 30, 2022 3:37 pm
by answerhappygod
- 20 Marks Consider A Savings Accounts Model At Time T 0 You Invest 30 000 In Rbc Bank Rbc Provides 12 Return In Ye 1 (29.65 KiB) Viewed 28 times
(20 marks) Consider a savings accounts model. At time t=0, you invest $30,000 in RBC bank. RBC provides 12% return in year 1, 12% return in year 2, and 15% return in year 3. At the end of year 1. you withdraw $4,400. At the end of year 2, you withdraw $1,210. Your discount rate is 10% per year. (a) Use FCF valuation model to calculate the NPV of your investment at time t=0 (10 marks) (b). Set up the RI Table, and compute RI for each year. Calculate PRI, the present value of the residual income series. (10 marks)