Individual IPS CFAI book calc questions 114, understand, numbers, payment

canadiananalyst

1. On pages 114 and 115 it shows the return calculation. Exhibit 4 shows that the trust payment increasing with inflation, so why do you need to add the annual inflation rate to the needs in year 2 / net investable assets at the end of year 1?
2. On pages 131-132 with the Fairfax return calculation, where does the $658,000 on the top of page 132 come from? I understand the numbers before it