Math

math9.xlsx

Part 1 Analytic Problems

	Name:			Date:
	Name:
	Gary Grandview — A continuing Case — Part 1
	Tools for Financial Planning
a.	This is a continuing case (Parts 1 - 6) Read the coordinating Word Document on Gary. Assume the role of Gary's financial advisor. Apply the facts and provide analytical answers. Note: Part 1 should be considered while analyzing Parts 2-6.
b.	Please make sure that WRAP TEXT and MERGE and CENTER are ON. (*Excel Toolbar, Home Tab, Alignment section)
c.	Ensure your answers can be seen in the yellow highlighted text box. Need more space? Increase height of the text box. a) Drag the bottom line of the number row (far left column) down, or b) Insert a row while inside the yellow text box.
d.	Ensure printed copies are readable. Print in Portrait.
e.	Save and upload the document in the In Box. Print a copy for class.
	Case Questions				Value of Points
					Possible	Deducted
1	Gary Grandview's Personal Cash Flow Statement
	Monthly Cash Inflow
	Disposable Income ( After Taxes )

	Total Cash Inflows			$0.00	2
	Monthly Cash Outflow
	Rent
	Renter's Insurance
	Utilities (gas and electric)
	TV, Internet, & House phone
	Cell Phone ( personal calls )
	Food (Consumed at home)
	Clothes
	Car expenses ( gas & maintenance )
	Vehicle Payment
	Vehicle Insurance Payment
	Entertainment



	Total Cash Outflows			$0.00	2
	Net Cash Flows			$0.00	2


2	Gary's Personal Balance Sheet
	Assets
	Cash
	Checking account
	Savings account
	Other liquid assets
	Total liquid assets			$0.00	2
	Household Assets
	Home
	Car
	Furniture
	Total household assets			$0.00	2
	Investment Assets
	Stocks
	Bonds
	Mutual Bonds
	Other investments
	Total investment assets			$0.00	2
	Total Assets			$0.00	2
	Liabilities
	Current Liabilities
	Loans
	Credit card balance
	Other current liabilities
	Total current liabilities			$0.00	2
	Long-Term Liabilities
	Mortgage
	Car loan
	College Loans
	Total long-term liabilities			$0.00
	Total Liabilities			$0.00	1

	Net Worth			$0.00	2
		(Total Assets - Total Liabilities)

3	Analyze Gary's expenditures. Offer Gary specific recommendations on how to
	adjust his budget to achieve the following.
a)	A positive cash flow (minimum point is to break even).


					2
b)	Pay off his debt.

					2
c)	Save $3,600 per year for retirement.

					2
d)	What are three advantages and three disadvantages of Gary having a credit card?
1)	Advantage:
	Disadvantage:
					1
2)	Advantage:
	Disadvantage:
					1
3)	Advantage:
	Disadvantage:
					1
4)	What additional goals do you think Gary should consider in the short term,
	intermediate and long term. What would change if Gary were to marry in 2 years?


					2
5)	Assuming that Gary has an employer matching fund plan and invests the $7,200 ($300 per month plus the matching fund) per year for 20 years, and begins investing five years from now, how much will be in fund in 25 years if Gary is able to invest at 7% per year?
	Future Value of an Annuity
	Payment per Period
	Number of Periods
	Interest Rate per year			7.00%
	Future Value			$0.00	2

6)	Compare the alternative of investing $7,200 every year for 25 years beginning today.
	(Again assume a 7 percent annual return.)
	Future Value of an Annuity
	Payment per Period
	Number of Periods
	Interest Rate per year			7.00%
	Future Value			$0.00	2

7)	Consider Gary's plan in the question 6. Is Gary's plan to retire in 25 years realistic? Will the plan provide an adequate income during Gary's retirement years estimating he will live for another 30 to 40 years? If not, provide Gary with a revised fund goal. Are there any other future factors Gary should consider when revising his retirement plan?
	Future Value of an Annuity
	Payment per Period
	Number of Periods
	Interest Rate per year			7.00%
	Future Value			$0.00	2


					2
8)	Develop three suggestions that could help Gary reduce his income tax exposure.
	The entire matrix must be completed.
	Suggestions to Reduce Taxes		Why is this an advantage?
a)					2
b)					2
c)					2

9)	Consider Gary's debt. Would any of your financial planning
	recommendations change if he were 45 and still single?
	If he were 60? Why or why not?
a)
					2
b)


					2
10)	After you informed Gary of his negative monthly net cash flow, Gary indicated
	that he may delay paying his credit card bills for a couple months to reduce his cash
	outflows. What are some consequences of non-payment of debts?

					2
				Total	50	0
				Final Score

Math

Part 1 Analytic Problems

Sheet2

Sheet3