Homework_2.1 (1)
docx
keyboard_arrow_up
School
San Jose City College *
*We aren’t endorsed by this school
Course
255
Subject
Industrial Engineering
Date
Feb 20, 2024
Type
docx
Pages
3
Uploaded by MagistrateCatMaster582
Week 2: Assignment 1
Allison’s Balance Sheet
Allison has completed a degree in Computer Science at Santa Clara Univ. and has just begun a full-time job at Alphabet Inc. (Google). Below are a few facts concerning her financial status and outlook (as of her first day on the job; July 1, 2020).
●
She owns a used car which she purchased for $20,000. Her remaining loan balance of $12,000 is to be paid out monthly over the next two years. She secured the loan from her dad and it carries no interest, so she only has to pay down the principal.
●
She has student loan debt of $48K. Now that she has graduated she plans to pay this off in 6 years with annual payments of $8,000 beginning December 1, 2020.
●
She has credit card debt with a current balance of $3,500.
●
Last week she signed a rental agreement for a Mountain View apartment. The agreement is month-to-month (i.e. she can cancel at any time with 30 days notice). It requires payment for each month in advance
.
1.
Monthly rent of $4,200 (the rent payment includes all utilities)
2.
She paid 1 month rent as a security deposit. This money is held by the apartment management against potential damage. Otherwise, it will act as the rent for her last month of occupation should she cancel her lease.
●
Her checking account balance is $6,300 (Net, after making her first month’s rent payment along with the security deposit).
●
Her job offer from Google consisted of
3.
$25K cash (net of taxes) hiring bonus. She received this on her first day of employment and deposited it promptly into a new savings account.
4.
Her base salary is $200K/year to be paid on the last day of each month.
Note that Google is an “at-will” employer. If you are not familiar with this term see;
https://www.indeed.com/hire/c/info/at-will-employment-what-is-this-exactly
She was given a grant of 500 shares of GOOG stock, issued as RSUs which will vest in 1 year.
Note: See Investopia: What to know about Restricted Stock Units.
●
Going forward, she estimates the following net income and expenses
5.
Her monthly take-home pay, after withholding for social security, income taxes, and
insurance is: $10,000/month
6.
In addition to her monthly rent of $4,200, she estimates the following ongoing expenses:
▪
Eating out: $500/mo
▪
Groceries/gas: $400/mo
▪
Clothing: $250/mo
▪
Insurance / health: $300/mo
▪
Misc: $600/mo
▪
Travel: $500/mo
●
Assignment:
I.
Build a personal balance sheet for Allison, effective the end of her first day on the job at Google (i.e. end of day, July 1, 2020)
II.
Build a personal balance sheet for Allison, effective at the end of her 1 year anniversary at Google. (i.e. end of day, July 1, 2021)
●
Use the following assumptions:
▪
GOOG share price of $144/share remains flat over time.
▪
Ignore interest rates on all loans and savings accounts
▪
Ignore depreciation in value of her car
▪
She uses the credit card account as a revolving debt, making monthly payments to equal new purchases while keeping the overall balance the same.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help