Your final project will be a financial plan. You will base your plan on the de

Your final project will be a financial plan.
You will base your plan on the details below.
THE DATA:
Single professional
– graduated five years ago
– works for mid-sized accounting firm at salary of $47,000
– considering a job change
– when started job, began a 401(k) plan accumulating $12,000 including the amount contributed by the employer that vests in five years
– just purchased a new car for $28,000 and has a four year loan at 4.5%
– has $2,000 in checking account
– has $9,000 in savings account
– shares an apartment with a college friend and pays one-half of $1,800 rent and one-half of all utilities and other costs
– pays $310 per month in student loans
– has $4,600 balance on credit card and only pays minimum amount each month
THE FORMAT:
Part One – Balance Sheet (Use worksheet as a guide) Provide support for the calculation of every item.
Part Two – Cash Flow Statement (Use worksheet as a guide) Provide support for the calculation of every item.
Part Three – Recommendations for employment issue along with facts and figures to support your recommendation.
This section should include a cover sheet that has the following sentence at the top – “My recommendation for the employment issue is…” – then includes several paragraphs about your recommendation and provide all financial calculations to show how you arrived at your recommendation.
Part Four – Recommendation for credit issue along with facts and figures to support your recommendation.
This section should include a cover sheet that has the following sentence at the top – “My recommendation for the credit issue is…” – then include several paragraphs about your recommendation and provide all financial calculations to show how you arrived at your recommendation.
Part Five – Recommendation for housing issue along with facts and figures to support your recommendation
This section should include a cover sheet that has the following sentence at the top – “My recommendation for the housing issue is…” – then include several paragraphs about your recommendation and provide all financial calculations to show how you arrived at your recommendation.
WHAT TO DO
Take the information as given. Do not change any data. You may, however, add any additional information to enhance the fact pattern if you believe it is relevant for the financial plan.
1. Prepare a personal balance sheet
should have statement and explanations of numbers plus any attachments
Remember that you may add to the information to enhance the fact pattern.
You may want to consider adding assets and/or debt that were not mentioned.
All items on the balance sheet must be explained.
2. Prepare a cash flow statement
should have statement and explanations of numbers plus any attachments
Remember that you may add information to enhance the fact pattern.
You may want to consider adding income items, and you should add expense items because only a few are mentioned.
All items on the income statement must be explained.
3. Employment: Compare current job with new position
should have cover and explain recommendation plus any attachments
Prepare a resume for the new position (see Worksheets for example)
Recommend action to take – keep current job or take new job and explain the choice
Write about financial and non-financial advantages and disadvantages
Remember that you may add to the information to enhance the fact pattern.
You may determine the education and experience for the resume
You may determine the type of new job and the salary & benefits of that position as well as the benefits, etc. of current position
(Note: Benefits may be non-financial as well as financial)
4. Credit: Evaluate debt situation
should have cover and explain recommendation plus any attachments
Compute personal financial ratios to assess current financial situation and explain what each ratio means. (see lecture notes for information on ratios)
Recommend action to take – maintain current payments or pay off debt
Remember that you may add to the information to enhance the fact pattern.
You may determine the specifics about the student loan, credit card, etc. that are not already stated above
5. Housing: Compare current shared apartment to solo new apartment
should have cover and explain recommendation plus any attachments
Prepare a chart to compare costs (rent, food, electric, cable, heat, etc.)
Recommend action to take – stay in shared apartment or get own apartment
Determine what is the best decision financially given all financial concerns and also address non-financial matters
Remember that you may add to the information to enhance the fact pattern.
You may determine the location, size, cost, etc. of the new apartment as compared to the current apartment.
NOTE: Show all your work and provide explanations for all numbers. Attach all work and supporting documentation that shows how you determined your recommendation and why.

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