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The basic capital needs analysis is a pure annuity model generally prepared on a pretax basis....

The basic capital needs analysis is a pure annuity model generally prepared on a pretax basis. The annuity concept means that if all of the assumptions happen exactly as expected, the person will die exactly at the assumed life expectancy with a retirement account balance of $0.

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Answer #1

Answer: TRUE

Explanation:

The annuity concept assumes 0 balance at the time of assumed life expectancy. The rates are worked out on that assumption. It is also done on a pre-tax basis.

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