(1) For part A, why the living expense, salary and regular contribution to TDA are not considered when calculating liquidity needs? Actually these cashflows are included in liquidity needs calculation in other years questions.
(2) For part B, calculating the FV of the portfolio, my calculation is
3,000,000 - 1,000,000 * (1 - 25%) = 2,250,000
I think the payment from Relex retirement plan should be taxed. Because the question is asking the pretax required return of the PORTFOLIO. So the portfolio future value must cover the tax expense of the Relex retirement plan.
Do I go wrong? The essay doesn’t tell that this payment is tax-exempt.
