Question 1: Application of Time 1Value of Money {30 marks} a} b} You have just joined the investment bani-ring firm of Mckenaie 3?: Co. They have offered you two different salary arrangements. You can have $i5, per year for the next two years, or you can have $55,DDU per year for the next two years, along with a $3, signing bonus today. If the interest rate is 12% compounded monthly, Twhich is a better offer? {It} marl-rs) In 313 years, you plan to set up a fellowship fund for Carleton university that pays out 3 lU-"year in perpetuity with an annually compounded discount rate of 5%. In order to set up the fund in 30 years, hon.r much do you need to save each year {starting this year) assuming you can get a semi-mutually compounded return of l'lrli per annum on your savings for the next 3'0 years? {5 marks) You have been hired to run a pension fund for Mackay Inc, a small manufacturing firm. The rm currently has $5 million in the fund and expects to have cash inflows of $2 million a year for the first 5 years followed by cash outows of $ 3 million a year for the next 5 years. Assume that interest rates are at 3%. i. How much money will be left in the fund at the end of the tenth year?r {Ill marks) ii. If you were required to pay a perpetuity after the tenth year {starting in year 11 and going through infinity} out of the balance left in the pension fund= how much could you afford to pay? (5 marks] (10+s+1s=so marks}