Question 1 (12 marks) You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive N$200 000 at the end of each year for the 30 years between retirement and death (you have estimated your death according to life mortality tables used by insurance companies). You know that you will be able to earn 11% per year during the 30-year retirement period. (@) How large a fund will you need when you retire in 20 years in order to provide the 30- year N$200 000 per year retirement annuity? (6 marks) (b) How much would you need to provide today as a single amount to the fund as calculated in (a) if you earn only 9% per year during the 20 years before retirement? (6 marks) Question 2 (25 marks) Good Hope Lid introduced a new product, NEW AGE, to its range last year. The machine used to mould each item is a bottleneck in the production process meaning that a maximum of 5,100 units per annum can be manufactured. The NEW AGE product has been a huge success in the marketplace and as a result, all items manufactured are sold. The marketing department has prepared the following demand forecast for future years as a result of feedback from customers. Year 2022 2023 2024 2025 Demand (units 7 100 9 100 11 100 4 100 The directors are now considering investing in a second machine that will allow the company to satisfy the excess demand. The following information relating to this investment proposal has now been prepared: Initial investment $20,000 Maximum additional output 5,000 units Current selling price $50 per unit Variable operating costs $28 per unit Fixed operating costs $15,000 per year If production remained at 5,100 units, the current selling price would be expected to continue throughout the remainder of the life of the product. However, if production is increased, it is expected that the selling price will fall to $45 per unit for all units sold. Again, this will last for the remainder of the life of the product. No terminal value or machinery scrap value is expected at the end of four years, when production of NEW AGE is planned to end. For investment appraisal purposes, Good