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Please help me in answering and understanding these questions. Thank you. 1) Franco, a twentyve year old, has just started a job as an ofcer

Please help me in answering and understanding these questions. Thank you.

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1) Franco, a twentyve year old, has just started a job as an ofcer in the Swiss Navy. He plans that he will earn (in real, net terms) $25,000 per annum for ten years, $45,000 for the ten years after that, and $55,000 for the last twenty years of his career. He expects to live to the age of eighty-ve. The current value of Franco's assets is estimated at $3,000. [Ra M 489-493, Notes 2-1] a) Assuming a zero real interest rate and no superannuation payments, What is Franco's level of consumption per year if he intends to consume a constant amount over the rest of his life? b) What key assumption needs to be made so that Franco can consume this amount in the early stages of his career? 0) How would the introduction of a guaranteed superannuation benet affect Franco's consumption and savings decisions

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