Wk 10 Debt Consolidation In-class Assignment No
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Debt Consolidation
In Class Assignment 3
This assignment will be completed in-class
in groups of three or four. One student should submit the completed assignment through D2L once it is complete. Please ensure all group members names and student number are on the assignment. Case Study – Tibor: Tibor Taylor, age 34, is single and has just returned to the workforce full-time as a graphic designer. Previously, he had reduced his work schedule to part-time so he could complete his master’s degree. He thought he had enough money saved to cover his expenses while he was in school, but he soon realized it wasn’t enough. He has come to you for help to get his spending and debt under control. He also wants
to discuss his mortgage as he is approaching the end of his term in 2 months. He has provided you with the following information:
Net Worth Statement
Tibor Taylor
Year Ending 20XX
Assets:
Chequing Account
Emergency Fund – TFSA
Car
Personal Possessions
Condominium
Total Assets
$2,000
$6,000
$16,000
$12,000
$400,000
$436,000
Liabilities:
RBC VISA
Scotiabank Mastercard
Unsecured Line of Credit
Mortgage Total Liabilities
$12,000
$11,000
$36,000
$235,000
$294,000
Net Worth:
$142,000
Debts
Balance
Interest
Rate
Monthly
Payment
# Years
to Repay
RBC Visa
$12,000
19%
$240
8.4
Scotiabank M/C
$11,000
19.99%
$220
9.2
Un. L of C
$36,000
8%
$1,080
3.1
Mortgage
$235,000
4.25%
$1,450
20.08
Total
$294,000
$2,990
Cash Flow Statement
Tibor Taylor
Year Ending 20XX
Cash Inflows:
Gross Income
Deductions (CPP, EI, Taxes)
Net Income (Take home pay)
$92,000
$22,488
$69,512
Cash Outflows:
Mortgage Payment
Property tax
Condo fees
Heat
Other Utilities Home insurance
Auto insurance & Maintenance
Gasoline
Food
Entertainment
Clothing
Other expenses/Vacation
RBC Visa payment
Scotiabank Mastercard payment
Line of credit payment
Total Expenses
$17,400
$1350
$3,000
$2,000
$2,900
$1,000
$1,500
$3,600
$3,200
$6,400
$2,400
$8,000
$2,880
$2,640
$12,960
$71,230
Deficit
($1,718)
1.
Review Tibor’s current financial information and briefly comment. (No Calculations required) (4 marks)
2.
Analyze a debt consolidation strategy using an instalment loan
for Tibor. a.
Briefly research two financial institutions
that provide Installment loans and provide the interest rate, term and any additional features. (2 marks)
b.
Based on your research, choose the best option for Tibor and explain why. (1 mark)
c.
How much money will Tibor save with this debt consolidation loan. (3 marks)
d.
List two benefits and two drawbacks for this debt consolidation. (2 marks)
3.
Analyze a debt consolidation strategy consolidating Tibor’ debt into his mortgage
. a.
Research a financial institution
that provides a 5-year fixed mortgage and a variable rate mortgage and provide the interest rate, term and additional features. (2 marks)
b.
Based on your research, choose the best option for Tibor and explain why. (1 mark)
c.
Does Tibor have enough equity in his condo to do a mortgage consolidation? Why or why not? (2 mark)
d.
Tibor would like to be able to cover his cash flow deficit and to have an additional $6,000 to put towards savings and other goals. Can he leave his amortization the same or will he need to extend his amortization? If yes, by how many years. (7 marks)
e.
What three recommendations would you make to Tibor, including 2 benefits and drawbacks for each.
(6 marks) Total Marks - /30
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Reference:
https://pdfroom.com/books/personal-finance-10th-edition/JzydD6rQ214
page.33
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Please help me.
Thankyou.
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Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
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Direct Costs (tuition and fees in each year): $2,000 Current annual earnings (i.e., w/o the additional education): $5,000
After completing the certificate program, Blake will work 3 years and then retire (thus, this is a 5-period model: t = 0, 1, 2, 3, 4). His estimated annual earnings, post-schooling, in each year are: $11,000
Blake's discount rate is 3%
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ANSWER AND RESOLVE THIS PROBLEM AND ANSWER SHOULD BEGIN WITH A CLEAR CONCLUSION THEN FOLLOWED BY BRIEF DISCUSSIONS.
A, B, C, X and Y are senior graduating Accountancy students in Far Southern University. Due to restrictions brought about by worsening COVID-19 pandemic, they have been staying at their common place in the province of Batanes. Among the four who are childhood friends since birth, only C is acquainted to X. While studying online to pursue their degree, they want to accomplish something else on the side. By way of a backgrounder, A had inherited from his departed parents 1 hectare of bare agricultural land. He wants to engage in an enterprise that will make his land productive. B is an independent self-sustaining seasonal farmer who owns 5 heads of young cattle and he wants to create an entity that will help him maximize the potential of what he has. C is a philanthropist at heart who is willing to help his town folks by providing them alternative sources of living…
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A, B, C, X and Y are senior graduating Accountancy students in Far Southern University. Due to restrictions brought about by worsening COVID-19 pandemic, they have been staying at their common place in the province of Batanes. Among the four who are childhood friends since birth, only C is acquainted to X. While studying online to pursue their degree, they want to accomplish something else on the side. By way of a backgrounder, A had inherited from his departed parents 1 hectare of bare agricultural land. He wants to engage in an enterprise that will make his land productive. B is an independent self-sustaining seasonal farmer who owns 5 heads of young cattle and he wants to create an entity that will help him maximize the potential of what he has. C is a philanthropist at heart who is willing to help his town folks by providing them alternative sources of living…
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Problem 9-29 (LO. 4)
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Tuition
$6,600
Books and course materials
1,500
Lodging
1,700
Meals
2,200
Laundry and dry cleaning
200
Campus parking
300
In addition, Elijah drove his personal automobile 2,200 miles in connection with the education. He uses the automatic mileage method.
Click here to access Exhibit 9.1 Limitations for Qualified Tuition Deduction.
If an amount is zero, enter "0".
a. Which of these expenses, if any, might qualify as deductions for AGI? Select "Yes" or "No" whichever is applicable.
Tuition (subject to limitation)
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b. $1,240
c. $2,000
d. $1,500
e. None of the above
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Bridget Youhzi works for a large firm. Her alma mater has
asked her to make a presentation to the upcoming
accounting honor society's annual scholarship dinner. Her
firm supports the presentation because it hopes to recruit
more excellent employees like Bridget. The university is 196
miles from her office. In order to get to the dinner by 5:00
p.m., she will need to leave work at 1:00 p.m. She can drive
her personal car and be reimbursed $0.50 per mile. The
dinner ends at 9:00 p.m. Company policy allows her to spend
the night if the return trip is four hours or more. There is a
student-run inn and conference center across the street from
campus that charges $101 per night.
Instead of driving, she could catch a 3:00 p.m. flight that has
a round-trip fare of $300. Flying would require her to rent a
car for $39 per day and pay an airport parking fee of $25 for
the day. The company pays a per diem of $35 for incidentals
if the employee spends at least six hours out of town. (The
per diem…
arrow_forward
Bridget Youhzi works for a large firm. Her alma mater has
asked her to make a presentation to the upcoming
accounting honor society's annual scholarship dinner. Her
firm supports the presentation because it hopes to recruit
more excellent employees like Bridget. The university is 196
miles from her office. In order to get to the dinner by 5:00
p.m., she will need to leave work at 1:00 p.m. She can drive
her personal car and be reimbursed $0.50 per mile. The
dinner ends at 9:00 p.m. Company policy allows her to spend
the night if the return trip is four hours or more. There is a
student-run inn and conference center across the street from
campus that charges $101 per night.
Instead of driving, she could catch a 3:00 p.m. flight that has
a round-trip fare of $300. Flying would require her to rent a
car for $39 per day and pay an airport parking fee of $25 for
the day. The company pays a per diem of $35 for incidentals
if the employee spends at least six hours out of town. (The
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- Reference: https://pdfroom.com/books/personal-finance-10th-edition/JzydD6rQ214 page.33arrow_forwardSubject - account Please help me. Thankyou.arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Exercise 9-15 (Algorithmic) (LO. 4) Samantha, who is single and has MAGI of $31,050, was recently employed by an accounting firm. During the year, she spends $3,450 for a CPA exam review course and begins working on a law degree in night school. Her law school expenses were $4,635 for tuition and $720 for books (which are not a requirement for enrollment in the course). Click here to access Concept Summary 9.2. If an amount is zero, enter "0". Assuming no reimbursement, how much of these expenses can Samantha deduct? $fill in the blank 1 8,805arrow_forward1. Blake is considering whether to enroll full-time in a two-year, webpage design certificate program. Enrolling in this program requires him to leave his current job and devote all of his available time to his studies. He plans to make his decision based on standard human capital analysis, and has obtained the following data to help with his decision: Direct Costs (tuition and fees in each year): $2,000 Current annual earnings (i.e., w/o the additional education): $5,000 After completing the certificate program, Blake will work 3 years and then retire (thus, this is a 5-period model: t = 0, 1, 2, 3, 4). His estimated annual earnings, post-schooling, in each year are: $11,000 Blake's discount rate is 3% Create a table with the following information (shown in columns): time period, direct costs in each period, indirect costs in each period, expected earnings with additional schooling, and incremental (net) benefits in each period (discounted by the appropriate rate). Given the data,…arrow_forwardOnly typed answerarrow_forward
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