FIN 4320 Final
Question 1
A household has the following statistics related to Balance Sheet and annual Cash Flow:
Balance Sheet Items: |
in Dollars |
Cash |
2,500 |
CD |
12,000 |
Savings Account Balance |
3,500 |
Credit Card Debt |
9,500 |
Current Year Portion of mortgage |
7,800 |
Cash Flow Items: | |
Salary |
115,000 |
Dividend Income |
1,500 |
Discretionary Expenses |
8,000 |
Nondiscretionary Expenses |
28,975 |
Debt Repayment |
8,700 |
Retirement Investments |
15,500 |
Capital Expenditure |
- |
Compute the Current Ratio.
Answer:- 1.04
Question 2
A household has the following statistics related to Balance Sheet and annual Cash Flow:
Balance Sheet Items: |
in Dollars |
Cash |
2,500 |
CD |
12,000 |
Savings Account Balance |
3,500 |
Credit Card Debt |
9,500 |
Current Year Portion of mortgage |
7,800 |
Cash Flow Items: | |
Salary |
115,000 |
Dividend Income |
1,500 |
Discretionary Expenses |
8,000 |
Nondiscretionary Expenses |
28,975 |
Debt Repayment |
8,700 |
Retirement Investments |
15,500 |
Capital Expenditure |
- |
Compute the Nondiscretionary Cost percentage
Answer:- 24.87%
Question 3
Consider the following information of a Whole Life policy and a Term Life policy:
Guaranteed Contract Premium |
Guaranteed Death Benefit |
Projected |
Projected Cash Value |
Term Premium |
$2,300 |
$200,000 |
0 |
0 |
$325 |
$2,300 |
0 |
0 |
$330 | |
$2,300 |
0 |
0 |
$335 | |
$2,300 |
0 |
$3,500 |
$340 | |
$2,300 |
$250 |
$6,000 |
$355 | |
$2,300 |
$400 |
$9,000 |
$370 | |
$2,300 |
$600 |
$13,000 |
$390 |
Which policy is better if cash can be invested at 9% return?
Answer:- Term Life Policy since IRR of difference in cash flows is less than 9%
Question 4
Which of the following insurance is intended to provide a limited choice of investments and an insurance component in the event of death?
Answer:- Universal Life
Question 5
Which of the following insurance categories provides coverage that makes payments to replace income of the insured once the person is incapacitated?
Answer:- Disability
Question 6
Peter who is self-employed has the following income and expenses during the year:
Business Income |
115,000 |
Interest Income |
1,500 |
Dividend Income |
2,200 |
Hobbies |
550 |
Recreational Expenses |
5,500 |
Vacation Expenses |
2,500 |
Alimony |
950 |
Healthcare Cost |
5,250 |
Clothing Expenses |
780 |
Insurance Cost |
6,250 |
Food Expenses |
8,275 |
Taxes |
1,150 |
Furniture Cost |
12,000 |
Debt Repayment |
22,000 |
New Debt Taken |
2,575 |
Retirement investments |
15,500 |
What is the total cash flow during the year?
Answer:- $56,070
Question 7
Peter who is self-employed has the following income and expenses during the year:
Business Income |
115,000 |
Interest Income |
1,500 |
Dividend Income |
2,200 |
Hobbies |
550 |
Recreational Expenses |
5,500 |
Vacation Expenses |
2,500 |
Alimony |
950 |
Healthcare Cost |
5,250 |
Clothing Expenses |
780 |
Insurance Cost |
6,250 |
Food Expenses |
8,275 |
Taxes |
1,150 |
Furniture Cost |
12,000 |
Debt Repayment |
22,000 |
New Debt Taken |
2,575 |
Retirement investments |
15,500 |
What is the total non-discretionary expenses during the year?
Answer:- $22,655
Question 8
Johnson family has found that the current cost of attending college is $27,000 per year. How much lump sum amount they should have in their education account so that the 4 years of college is funded? Assume education inflation to be 6.25% and investment return to be 7% per year.
Answer:- $106,870
Question 9
Which one of the following is an example of an annuity?
Answer:- the payment of $259 a month for three consecutive years
Question 10
Steve is planning to retire in couple of years. He has estimated that his annual requirement at the beginning of the1st year of retirement would be $75,000 per year. He expects to live for 22 years after retirement. How much should be the accumulated (lump sum) amount in his retirement account at the beginning of retirement so that his post retirement period is funded. Assume inflation to be 2.75% and investment return to be 8.25% per year.
Answer:- $1,007,417
Question 11
Consider the following information of a Whole Life policy and a Term Life policy:
Guaranteed Contract Premium |
Guaranteed Death Benefit |
Projected |
Projected Cash Value |
Term Premium |
$2,300 |
$200,000 |
0 |
0 |
$325 |
$2,300 |
0 |
0 |
$330 | |
$2,300 |
0 |
0 |
$335 | |
$2,300 |
0 |
$3,500 |
$340 | |
$2,300 |
$250 |
$6,000 |
$355 | |
$2,300 |
$400 |
$9,000 |
$370 | |
$2,300 |
$600 |
$16,000 |
$390 |
What is the IRR of difference in cash flows between Whole Life and Term Life policies?
Answer:- 7.79%
Question 12
Marvin had two term policies to compare with costs as shown below. Based on 7% after tax discount rate, which one should he select and why?
Years Policy A Policy B
1 $175 $225
2 $215 $230
3 $250 $235
4 $270 $260
5 $290 $285
Answer:- Policy A, since NPV of Policy A is $968 while NPV of Policy B is $1005
Question 13
Maria wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%. How much should be the serial payment in the 1st year so that Maria can achieve the target?
Answer:- $6830
Question 14
Maria wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%. How much should be the serial payment in the 4th year so that Maria can achieve the target?
Answer:- $7196
Question 15
Maria wants to accumulate $45,000 in today's dollar terms in the next 6 years. She expects to earn a return of 6.25% per year and inflation is expected to be 1.75%. How much should be the serial payment in the 5th year so that Maria can achieve the target?
Answer:- $7321
Question 16
Consider the following statistics for a household's annual cash flow: Net Cash Flow ($3,400); Nondiscretionary Expenses ($32,750); Discretionary Expenses ($9,250); Retirement Investments ($13,500) and Debt Repayment ($4750).
Calculate the Gross Savings percentage.
Answer:- 34.01%
Question 17
Dorothy has $750 in cash, $2000 in savings account, $34,300 in stocks, $5,500 in bonds, and owns a car worth $15,500. She had $1,500 in credit card payments and an education loan of $24,000 of which $2,700 is due during the current year. She has a mortgage loan of $300,000 of which $7,000 due this year. She has an auto loan of $9,500 of which $3,700 is due in the next 12 months. She owns a home worth $350,000, furniture and fixtures of $1,500, appliances with a value of $1,000, a Condo worth $120,000 and stamp collection of $1,000. She also has mortgage on condo for $97,500 of which $3,200 is payable during the current year.
What is Dorothy total current assets?
Answer:- $2,750
Question 18
Dorothy has $750 in cash, $2000 in savings account, $34,300 in stocks, $5,500 in bonds, and owns a car worth $15,500. She had $1,500 in credit card payments and an education loan of $24,000 of which $2,700 is due during the current year. She has a mortgage loan of $300,000 of which $7,000 due this year. She has an auto loan of $9,500 of which $3,700 is due in the next 12 months. She owns a home worth $350,000, furniture and fixtures of $1,500, appliances with a value of $1,000, a Condo worth $120,000 and stamp collection of $1,000. She also has mortgage on condo for $97,500 of which $3,200 is payable during the current year.
What is Dorothy total household assets?
Answer:- $18,000
Question 19
Dorothy has $750 in cash, $2000 in savings account, $34,300 in stocks, $5,500 in bonds, and owns a car worth $15,500. She had $1,500 in credit card payments and an education loan of $24,000 of which $2,700 is due during the current year. She has a mortgage loan of $300,000 of which $7,000 due this year. She has an auto loan of $9,500 of which $3,700 is due in the next 12 months. She owns a home worth $350,000, furniture and fixtures of $1,500, appliances with a value of $1,000, a Condo worth $120,000 and stamp collection of $1,000. She also has mortgage on condo for $97,500 of which $3,200 is payable during the current year.
What is Dorothy total marketable investments?
Answer:- $39,800
Question 20
What is the difference in future value between savings in which $2,500 is deposited each year at the beginning of the period and the same amount deposited at the end of the period? Assume an interest rate of 5.25% per year and that both are due at the end of 12 years.
Answer:- $2120
FIN 4320 Exam 1
FIN 4320 Exam 2
FIN 4320 Final
Buy FIN 4320 Final Answers Online
Talk to our expert to get the help with FIN 4320 Final to complete your assessment on time and boost your grades now
The main aim/motive of the management assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignments. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks.Â The experts of the assignment help services at urgenthomework.com are so much skilled, capable, talented, and experienced in their field of programming homework help writing assignments, so, for this, they can effectively write the best economics assignment help services.
Get Online Support for FIN 4320 Final Assignment Help Online
Resources
- 24 x 7 Availability.
- Trained and Certified Experts.
- Deadline Guaranteed.
- Plagiarism Free.
- Privacy Guaranteed.
- Free download.
- Online help for all project.
- Homework Help Services
Testimonials
Urgenthomework helped me with finance homework problems and taught math portion of my course as well. Initially, I used a tutor that taught me math course I felt that as if I was not getting the help I needed. With the help of Urgenthomework, I got precisely where I was weak: Sheryl. Read More