David invested in a fund from age 40 with regular payments of $300 per fortnight (2 weeks) in advance for 10 years. At age 55, David added $20,000 to his investment in the fund. From age 60, David withdrew cash annually from the fund with $12,000 at age 60 and increased it by 3% each year thereafter. (a) Consider the fund as a project with the money invested as cash outflows and the money withdrawn as cash inflows. 

Calculate the net present value at age 40 of the net cash flows up to age 65 (including the withdrawal at age 65) and the corresponding accumulated profit by age 65 at a risk discount rate of 4% per annum. What does this accumulated profit mean? 

(b) Following part (a), calculate the discounted payback period (in integer years) for David’s investment in the fund. 

(c) Calculate the money-weighted rate of return required to ensure that the fund has enough money to pay the withdrawal by David up to age 85.