Mr. S, a political scientist graduated 8 months ago has problems in managing his budget. He has got a regular income and no large bills but still fails in managing the budget since he like to spend without a purpose and exceeds his budget every month. His credit card balances keep on increasing and he really needs to follow some budget control methods. Characters in the case: Mr. S Adequate information: Mr. S earns a regular income and has no large bills Mr. S has no control over his budget and exceeds the budget every month To determine: determine : Budget control methods and how to each one of them be helpful in gaining control over the finances.

Question

Want to see the full answer?

Answer 1

Question

Chapter 3, Problem 4FPC

Summary Introduction

Case summary: Mr. S, a political scientist graduated 8 months ago has problems in managing his budget. He has got a regular income and no large bills but still fails in managing the budget since he like to spend without a purpose and exceeds his budget every month. His credit card balances keep on increasing and he really needs to follow some budget control methods.

Characters in the case: Mr. S

Adequate information:

Mr. S earns a regular income and has no large bills

Mr. S has no control over his budget and exceeds the budget every month

To determine: determine: Budget control methods and how to each one of them be helpful in gaining control over the finances.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

What are the implications of missing a credit card payment in finance?

Omni Advisors, an international pension fund manager, uses the concepts of purchasing power parity (PPP) and the International Fisher Effect (IFE) to forecast spot exchange rates. Omni gathers the financial information as follows: Base price level 100 Current U.S. price level 105 Current South African price level 111 Base rand spot exchange rate $ 0.188 Current rand spot exchange rate $ 0.171 Expected annual U.S. inflation 7% Expected annual South African inflation 5% Expected U.S. one-year interest rate 10% Expected South African one-year interest rate 8% Required: a. The current ZAR spot rate in USD that would have been forecast by PPP.Note: Do not round intermediate calculations. Round your answer to 4 decimal places. b. Using the IFE, the expected ZAR spot rate in USD one year from now.Note: Do not round intermediate calculations. Round your answer to 4 decimal places. c. Using PPP, the expected ZAR spot rate in USD four years from now.Note: Do not round intermediate calculations.…

Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR11,000. The annual cash flows over the five-year economic life of the project in ZAR are estimated to be 3,300, 4,300, 5,290, 6,280, and 7,250. The parent firm's cost of capital in dollars is 9,5 percent. Long-run inflation is forecasted to be 3 percent per annum in the United States and 7 percent in South Africa. The current spot foreign exchange rate is ZAR per USD = 3.75. Required:. Calculating the NPV in ZAR using the ZAR equivalent cost of capital according to the Fisher effect and then converting to USD at the current spot rate. - NPV in USD using fisher effect Converting all cash flows from ZAR to USD at purchasing power parity forecasted exchange rates and then calculating the NPV at the dollar cost of capital. - NPV in USD using PPP rates Are the two USD NPs different or the same? What is the NPV in dollars if the actual pattern of ZAR per…