2.1 Answer the following: a) Investment alternatives have different levels of risk and return. Considering this, explain how investors should decide where to invest their money. (5 marks) b) Rewarding managers based on accounting profits can induce managers to manipulate the accounting numbers Discuss your arguments using relevant examples. (6 marks) 2.2 After completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 35 years from now and thinking about creating a fund that will allow you to receive $25,000 at the end of each year for 30 years after your retirement. The interest rates are expected to be 3.45% per annum during the 35year pre-retirement period, and 4.15% during the retirement period. Required: a) To provide the 30-year, $25,000 a year annuity, calculate how much should be in the fund account when you retire in 35 years. (4 marks) b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 3.75% per year during the 35-year pre-retirement period? (3 marks) c) (Using different interest rates) Assume that the interest in the pre-retirement period is 3.5%, and in the post-retirement period, it is 4.05%. To fund the 30-year annual annuity payments of $25,000, how much do you need to save annually until retirement? (deposits are made at the end-of-year for 35 years). (4 marks)