FIN5011 W2024 - Assignment 2 (1)
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Fundamentals of Financial Planning FIN5011 Winter 2024 Copyright © 2024 Giulio Iacobelli. All rights reserved Assignment 2: 20% of final grade Due: April 2nd, 2024 at: 11:59 P.M. (Toronto time) Last submissions are subject to a -20% late penalty per day. Assignment Overview: In groups of 3 or 4, complete the below case study. The purpose of the assignment is to apply the material in the course. You may need to do your own research to answer some of the questions. You are a financial planner with a specialty in tax and credit. You began your career working for a bank and are now a self-employed financial planner. Last week, a couple walked into your office looking for advice. Martin and Adele, bought a home in Oakville, Ontario, 5-years ago. At the end of the month, January 31, 2024, their mortgage will be up for renewal. They are not sure what is going to happen to interest rate, given the current economic situation, and they want to lock in a 4-year or 5-year fixed rate. Martin’s annual income this year (2023) is expected to be $102,000 a year and Adele’s annual income is expected to be $71,000 a year. One of the financial institutions you represent is currently offering clients fixed rate mortgages. The current rates for a fixed mortgage are: 6.3% for a 4-year closed term and 6.5% for a 5-year closed term. Martin and Adele provide you with the following information about their home and mortgage: • Purchase price of their home: $1,00,000.00 • Market value of their home: $1,500,000.00 • Original Mortgage: $775,000.00 • Mortgage amortization: 25 years • Mortgage term: 5-years, fixed rate compounding semi-annually • Mortgage Rate: 2.75% • Payment Schedule: Monthly Using the above information above, answer the following questions: 1.
What is the balance outstanding on Martin and Adele’s mortgage at the end of the 5-year term (balance as of Mar. 31, 2024)? Show all calculations for full marks (10 marks). 2.
If Martin and Adele select the 4-year term, what is the balance outstanding at the end of the 4-year term? (5 marks) 3.
If Martin and Adele select the 5-year term, what will their monthly payments be? (5 marks) 4.
Assuming they take the 5-year mortgage rate, how much interest will they have paid over the 10-
year period? (5 marks). 5.
How much money will Martin have to pay towards Federal and Provincial Taxes in 2024? Assume no tax credits (5 marks). 6.
How much money will Adele have to pay towards Federal and Provincial Taxes in 2024? Assume no tax credits (5 marks).
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O a. 3.77
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A newspaper editor starts a retirement savings plan in which $225 per month is deposited at the beginning of each month into an account that earns an annual interest rate of 6.4% compounded monthly.
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Match the option with the lowest monthly payment to highest monthly payment.
$12,000 loan with 1% simple
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a) Will credit cards help? The average undergraduate student leaves college with a diploma and
around $2750 in credit card debt (graduate students; $4800). Suppose you have a credit card with a
balance of $2750 and an interest rate of 19.8% APR. The minimum payment is $45.00. The amount
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$45.38
$45.00
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$45.00
$45.00
$45.00
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9.
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Sheffield Corp. uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable will become
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The following is Green Co.'s Pre-Closing Trial Balance as of December 31, 2017. Green's accounting period is a month,
the month of December 2017. (Note that the accounts are not
thus the balances in the temporary accounts are for
listed in their normal sequence -- rather they are listed in alphabetical sequence.)
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Accounts Payable
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Equipment
73,000
150
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A process with no beginning work in process, completed and transferred out 85200 units during a period and had 50100 units in the
ending work in process inventory that were 20% complete. The equivalent units of production for the period for conversion costs were:
O 95220 equivalent units.
O 135300 equivalent units.
O 70200 equivalent units.
O 85200 equivalent units.
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- Eat min C e New tab Λ Content xW Quiz 3-MAT-143, section 03F, Fa X + Q A ✩ https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 Viewing Saved Work Revert to Last Response DETAILS MY NOTES You deposit $850 in an account paying an annual simple interest rate of 7.8%. Find the future value of the investment (in dollars) after 1 year. DETAILS MY NOTES Calculate the simple interest due (in dollars) on a 40-day loan of $1,600 if the annual interest rate is 9%. (Use 360 days in 1 year.) $ DETAILS MY NOTESarrow_forwardabout:blank Blackboard Learn sc.edu/webapps/assessment/take/launch isp?course assessment_id=_114 Remaining Time: 1 hour, 23 minutes, 35 seconds. Question Completion Status: A Moving to the next question prevents changes to this answer. Question 1 What is the Payback Period for the following investment? Year 1 2 3 4 5 O a. 3.77 Ob. 3.73 Oc. 3.89 Od. 3.96 Cash Out $ (1,600,000) (710,000) Cash In 550,000 580,000 610,000 640,000 670,000 A Moving to the next question prevents changes to this answer. 000 900 F2 F3 F4 MacBookarrow_forwardWhat is the answer A thru D?arrow_forward
- New tab x Content x Quiz 3-MAT-143, section 03F, Fax + https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 a A ✰ DETAILS MY NOTES ASK YOUR TEACHE A newspaper editor starts a retirement savings plan in which $225 per month is deposited at the beginning of each month into an account that earns an annual interest rate of 6.4% compounded monthly. Find the value of this investment (in dollars) after 20 years. (Round your answer to the nearest cent.) $ DETAILS MY NOTES ASK YOUR TEACHI logo design company purchases four new computers for $12,500. The company finances the cost of the computers for 3 years at an annual interest rate of 5.175% compounded monthly. Find the month ayment (in dollars) for this loan. (Round your answer to the nearest cent. See Example 8 in this section.) Submit Assignment Home My Assignments Request Extension Copyright © 1998-2024 Cengage Learning, Inc. All Rights Reserved | TERMS OF USE PRIVACY 12:03 PMarrow_forwardAssignment: Chapter 12 Homework Time Remaining: 0:58:20 Questions Problem 12.08 (New Project Analysis) 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 0 eBook Assignment Score: 78.57% Save Submit Assignment for Grading Question 4 of 14 ► Check My Work You must evaluate the purchase of a proposed spectrometer for the R&D department. The purchase price of the spectrometer including modifications is $140,000, and the equipment will be fully depreciated at the time of purchase. The equipment would be sold after 3 years for $32,000. The equipment would require an $8,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $43,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 25%. a. What is the initial investment outlay for the spectrometer after bonus depreciation is considered, that is, what is the Year 0 project cash flow? Enter your answer as a positive value.…arrow_forward17.39 .. 90 PROBLEMS OF SEMESTER FINAL TEST 2021 Word es Mailings Review View Help O Tell me what you want to do Aa - AaBbCeDd AaBbCcl AaBbCcDe AaBbCcDe AaBt Heading 2 Heading 3 T Normal I No Spac. Headin Paragraph Styles 4.5.6 7 8.. 9. • 10. 11 12. 13. 14. 15.I Thursday : January 21, 2021 --- 80 Minutes 1. In this section we examine three theories of investor preference: The dividend irrelevance theory. The "bird in the hand" theory, the tax preference theory, which theory is the best? What is the different of stock dividends, stock splits, and stock repurchase. 2. In the working capital management, we know about cash conversion cycle model. For problem if average inventories are $3 million and sales are $11 million. If receivables are S 657.535 and sales are S 11 million. Then, if its cost of goods sold are $9 million per year and if its accounts payable average $ 657.535. What is the length of the cash conversion sicle? 3. The ELGRAJO Corporation has capital structure as follow…arrow_forward
- Auditing || fall20 Dashboard My courses ACCT4141_iram_fall20 WEEK 7: 25 OCTOBER - 31 OCTOBER Case study 2 Separate groups: 5 My Submissions Case 2 Title Start Date Due Date Post Date Marks Available Case study 2 - Case 2 27 Oct 2020 - 08:00 28 Oct 2020 - 06:00 28 Oct 2020 - 19:00 100 Summary: On Chapters 9, 10, and 11: The YuRaeKa charity was established in 1960. The charity’s aim is to provide support to children from disadvantaged backgrounds who wish to take part in sports such as tennis, badminton, squash, basketball and football. YuRaeKa has a detailed constitution[1] which explains how the charity’s income can be spent. The constitution also notes that administration expenditure cannot exceed 10% of income in any year. The charity’s income is derived wholly from voluntary donations. Sources of donations include: (i) Cash collected by volunteers asking the public for donations in shopping areas, (ii) Cheques sent to the charity’s head office, (iii) Donations…arrow_forwardO Odysseyware Ô https://sfdr.owschools.com/owsoo/studentAssignment/index?eh=65534403 San Felipe Der RIO CISD- IS JALYN GARCIA Odysseyware LEARN MESSAGE HELP SIGN OUT Assignment - 1. Credit Scores and Loans Attempt 1 of 1 ASSIGNMENTS COURSES SECTION 3 OF 4 QUESTION 6 OF 8 1 2 4 5 >> Match the option with the lowest monthly payment to highest monthly payment. $12,000 loan with 1% simple 1. lowest payment interest over 7 years $7,500 loan with 4% simple interest 2. second highest payment over 5 years $8,500 loan with 2% simple 3. third highest payment interest over 6 years $10,000 loan with 3% simple 4. fourth highest payment interest over 4 years 9:19 PM 后 ENG 2/4/2021 P Type here to search Rarrow_forwardhelp please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all workingarrow_forward
- Font Paragraph Styles Editing Dictate Editor Paste Undo Clipboard Styles Voice Editor a) Will credit cards help? The average undergraduate student leaves college with a diploma and around $2750 in credit card debt (graduate students; $4800). Suppose you have a credit card with a balance of $2750 and an interest rate of 19.8% APR. The minimum payment is $45.00. The amount of interest due each month is figured as current balance where r is the rate (decimal form) and n is 12. Fill in the table, making minimum payments. Current balance Month Interest Payment Amount applied to principal 1 $2750.00 $45.38 $45.00 -$0.38 $2750.38 $45.00 $45.00 4 $45.00 $45.00 $45.00 $45.00 8. $45.00 9. $45.00 10 $45.00 11 $45.00 12 $45.00 Page 4 of 6 1011 words DFocus 80% P Type here to search 立arrow_forwardCourses Mastering Chernie X 2MateryCheme X loud/modules/unproctoredTest.QuestionSheet McCraith-Sectic x Updte Help Caroline Achienge S01243611acadceduLogout all 2021 I Chapter 1 Consumer Finance / Section 1.5 Digital Exercises Gradebook. Extemat kercises Remaining Time Unimted Suppose you are paid $3,000 per month and your employer's 401(k) matches your contributions by 10% up to a maximum of 15% of your pay. Assuming you max-out your retirement savings and you work for 25 years, how much will the 401(k) be worth when you retire (if you can get an APR of 8% during your work years)? If you are taxed at a rate of 27%, then how much will you have when you retire? Round all answers to 2 decimal places. Before taxes retirement amount $ Number After taxes retirement amount $ Number Submit Assignment Quit & Save Васк Question Menu 4 Next 38°F Partly sunny A 0) 411 PM 11/19/202 end home delete prt sc 144 4+ 4- 40 num lock backspace & 8. 6. 7. home |近arrow_forwardhttps://sfdr.owschools.com/owsoo/studentAssignment/index?eh=65534403 SSIGNMENTS Assignment - 1. Credit Scores and Loans Attempt 1 of 1 COURSES SECTION 3 OF 4 QUESTION 1 4 8 You get a personal loan of $5,000 with 12% simple interest too be paid over 30 months. What is your monthly payment? O $150.00 O $166.67 O $216.67 O $175.00 NEXT QUESTION O ASK FOR HELP TURN IT IN e to search Pause T H K B N M Alt Ctarrow_forward
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