Concept explainers
a
Case summary: H and B had $10,660 monetary assets, in the form of cash, savings accounts, and some small investments, they wanted to open a checking account and, determining their requirement it was recommended accordingly
Characters in the case: HJ and BJ.
Adequate Information: HJ and BJ has $10,660 in monetary assets. It is required to recommend them best checking and savings account that will enable them to effectively use the first and second tools of monetary asset management, use of
Savings and checking accounts have facility to withdraw money multiple times from the account and also earns interest, the funds used for day to day expenses can be deposited in these accounts which earns daily interest, and money market account, there are certain money market instruments such as Money market mutual funds which also has checking facility these type of instruments can be selected by HJ and BJ so that they can earn most of it.
To determine: Recommendations to J about the use of first and second tools of monetary asset management by selecting checking and savings accounts effectively.
Introduction:
Monetary asset management is the technique used to see that best possible interest is earned with lowest possible fees on funds that are available for day-to-day expenses, emergencies, savings, and investment opportunities. A best monetary asset management helps you to earn interest on your money while maintaining adequate liquidity and safety.
b
Case summary: H and B had $10,660 monetary assets, in the form of cash, savings accounts, and some small investments, they wanted to open a checking account and determining their requirement it was recommended accordingly
Characters in the case: HJ and BJ
Adequate Information: HJ and BJ have $10,660 in monetary assets. It is required to choose best checking and savings account that will help them to use the first and second tools of monetary asset management, money
Savings and checking accounts have facility to withdraw money multiple times from the account and also earns interest, the funds used for day to day expenses can be deposited in these accounts which earns daily interest, and money market account, there are certain money market instruments such as Money market mutual funds which also has checking facility these type of instruments can be selected by HJ and BJ so that they can earn most of it.
To determine: The recommendations for J regarding use of money market accounts.
Introduction:
Monetary asset management is the technique used to see that best possible interest is earned with lowest possible fees on funds that are available for day-to-day expenses, emergencies, savings, and investment opportunities. A best monetary asset management helps you to earn interest on your money while maintaining adequate liquidity and safety.
c
Case summary: H and B had $10,660 monetary assets, in the form of cash, savings accounts, and some small investments, they wanted to open a checking account and determining their requirement it was recommended accordingly
Characters in the case:HJ and BJ
Adequate Information: HJ and BJ has $10,660 in monetary assets. It is required to recommend them best checking and savings account that will enable them to effectively use the first and second tools of monetary asset management, use of money market account, and it is also required to advise them on resolving the disagreements in future.
Savings and checking accounts have facility to withdraw money multiple times from the account and also earns interest, the funds used for day to day expenses can be deposited in these accounts which earns daily interest, and money market account, there are certain money market instruments such as Money market mutual funds which also has checking facility these type of instruments can be selected by HJ and BJ so that they can earn most of it.
To determine: The savings instrument recommended for savings when the objective is to purchase new home.
Introduction:
Monetary asset management is the technique used to see that best possible interest is earned with lowest possible fees on funds that are available for day-to-day expenses, emergencies, savings, and investment opportunities. A best monetary asset management helps you to earn interest on your money while maintaining adequate liquidity and safety.
d
Case summary: H and B had $10,660 monetary assets, in the form of cash, savings accounts, and some small investments, they wanted to open a checking account and determining their requirement it was recommended accordingly
Characters in the case: HJ and BJ
Adequate Information: HJ and BJ has $10,660 in monetary assets. It is required to recommend them best checking and savings account that will enable them to effectively use the first and second tools of monetary asset management, use of money market account, and it is also required to advise them on resolving the disagreements in future.
Savings and checking accounts have facility to withdraw money multiple times from the account and also earns interest, the funds used for day to day expenses can be deposited in these accounts which earns daily interest, and money market account, there are certain money market instruments such as Money market mutual funds which also has checking facility these type of instruments can be selected by HJ and BJ so that they can earn most of it.
To determine: The amount they would have in the account after one year it J could put most of their money $10,660 in money market account.
Introduction:
Monetary asset management is the technique used to see that best possible interest is earned with lowest possible fees on funds that are available for day-to-day expenses, emergencies, savings, and investment opportunities. A best monetary asset management helps you to earn interest on your money while maintaining adequate liquidity and safety.
e
Case summary: H and B had $10,660 monetary assets, in the form of cash, savings accounts, and some small investments, they wanted to open a checking account and determining their requirement it was recommended accordingly
Characters in the case: HJ and BJ
Adequate Information: HJ and BJ has $10,660 in monetary assets. It is required to recommend them best checking and savings account that will enable them to effectively use the first and second tools of monetary asset management, use of money market account, and it is also required to advise them on resolving the disagreements in future.
Savings and checking accounts have facility to withdraw money multiple times from the account and also earns interest, the funds used for day to day expenses can be deposited in these accounts which earns daily interest, and money market account, there are certain money market instruments such as Money market mutual funds which also has checking facility these type of instruments can be selected by HJ and BJ so that they can earn most of it.
To determine: The way H and B can resolve and prevent disagreements in future.
Introduction:
Monetary asset management is the technique used to see that best possible interest is earned with lowest possible fees on funds that are available for day-to-day expenses, emergencies, savings, and investment opportunities. A best monetary asset management helps you to earn interest on your money while maintaining adequate liquidity and safety.
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Chapter 5 Solutions
Personal Finance (MindTap Course List)
- Jennifer Pontesso, from Lincoln, Nebraska, wants to better understand her financial situation. Use the following balance sheet and cash flow statement information to determine her net worth and her net surplus for a recent month. Liquid assets: $10,000; home value: $210,000; monthly mortgage payment: $1,300 on $170,000 mortgage; investment assets: $90,000; personal property: $20,000; total assets: $330,000; short term debt: $5,500 ($250 a month); total debt: $175,500; monthy gross income: $9,000; monthly disposable income: $6,800; monthly expenses: $6,000.arrow_forwardA Family certifies it has or owns the following items: 10,000 in a foreign bank savings account Two classic paintings worth $20,000 total, that were handed down to the family as heirlooms. A brand - new speed boat valued at $15,000. A checking account with a six-month average balance of $1, 287 Based on the above, what is the total cash value of the family's assets? A. 10,000 B30,000 C. 45,000 D. 41,287 Ε. 11, 287arrow_forwardOn the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year, and the remaining balance at the end of the third year. How much better off, in terms of net cash flow, would he have been if he had not made the withdrawals at the ends of years one and twoarrow_forward
- Karen’s Diner has provided the following financial information: cashand marketable securities = $250,000, accounts receivable =$1,350,000, inventory = $2,770,000, accrued wages and taxes=$455,000, accounts payable = $911,000, and notes payable =$550,000. Find the net working capital( round your answer to the nearest dollar amount.)arrow_forwardIt is typical for Jane to plan, monitor, and assess her financial position using cash flows over a given period, typically a month. Jane has a savings account, and her bank loans money at 6% per year while it offers short-term investment rates of 5%. Jane’s cash flows during August were as follows: Items Item Cash inflow Cash outflow Clothes $1,000 Interest received $ 450 Dining out 500 Groceries 800 Salary 4,500 Auto payment 355 Utilities 280 Mortgage 1,200 Gas 222 You are required to: Determine Jane’s total cash inflows and cash outflows. b. Determine the net cash flow for the month of August. c. If there is a shortage, what are a few options open to Jane? d. If there is a surplus, what would be a prudent strategy for her to follow?arrow_forwardare the three ways for Maria to better manage her cash balance?Maria Luna, a 25-year-old nurse, works at a hospital that pays her every 2 weeks by direct deposit into her checking account which pays no interest and hasno minimum balance requirement. She takes home about PHP9,000 every 2 weeks or about PHP18,000 per month.She maintains a checking account in the bank that does not earn any interest income with a balance of around PHP7,500. Whenever it exceeds that amount she transfers the excess into her savings account, which currently pays 1.5% annual interest.She currently has a savings account balance of PHP85,000 and estimates that she transfers about PHP3,000 per month from her checking account into her savings account.Maria pays her bills immediately when she receives them. Her monthly bills average about PHP9,500, and her monthly cash outlays for food and transportation cost total about PHP4,500.An analysis of Maria’s bill payments indicates that on average she pays her bills 10…arrow_forward
- John deposits $2,000 in the first year, $800 in the second year and $600 in the third year to WMW Bank with an interest rate of 12%. Sky deposits $3,800 in the third year to the same bank. At the end of the fifth year, Sky and John have the same amount of money in their accounts. What is the interest rate for Kuzey?arrow_forwardKaren’s Diner has provided the following financial information: cashand marketable securities = $250,000, accounts receivable =$1,350,000, inventory = $2,770,000, accrued wages and taxes=$455,000, accounts payable = $911,000, and notes payable =$550,000. Find the net working capital (Round to the nearest dollar amount)arrow_forwardOn the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year, and the remaining balance at the end of the third year. What is the net cash flow?arrow_forward
- Will borrowed$1205 from his bank for 16 months using a 4.1%discount note. Determine how much interest will paid the bank for the use of its money and how much Willreceivedfrom the bank.arrow_forwardMr. P's bank statement dated 31.12.2021 showed a balance with his Bank of $924, when checked with his Cash Book the following were noted :(a) During December, the Bank had paid $200 for a yearly contribution of Mr. P made to a local charity, as per his standing order. This amount appeared in the Bank statement but not in the Cash Book.(b) The Bank had credited his account with $28 interest and had collected on his behalf `$230 as dividends. No corresponding entries were made in the Cash Book.(c) A cheque of $65 deposited into the Bank on 28.12.2021 was not cleared by the Bank till after 31.12.2021(d) A cheque of $150 deposited into and cleared by the Bank before 31.12.2021 was not entered in the Cash Book, through an oversight.(e) Cheques drawn by and posted to parties by Mr. White on 31.12.2021 for $73, $119 and $46 were presented for payment to the Bank only on 3.1.2021.arrow_forwardSheffield Fertilizer Co. owns the following assets at the balance sheet date. Cash in bank savings account $ 8,500 Cash on hand 850 Cash refund due from the IRS 1,110 Checking account balance 14,290 Postdated checks 510 What amount should Sheffield report as cash in the balance sheet?arrow_forward
