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  3. (20 marks) consider a savings accounts model. at t

(20 marks) Consider a savings accounts model. At time t=0, you...

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Accounting

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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 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)

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