Reference no: EM13925396
Using a hypothetical situation, make calculations to assist in retirement planning (e.g., determine stream of savings necessary for certain standard of retirement).
Make the following assumption about a person:
Age is 40, retirement in 25 years.
Salary is 100,000; growth rate per year is 4%.
Interest rate is 10% (savings grow at 10%).
A constant living standard is desired.
Inflation (CPI rate) is 3%.
Estimated years of retirement is 20.
To maintain standard of living during retirement, one requires 80% of non-retirement expenditure.
With your team: Calculate the stream of expenses possible with the assumed income (Hint: the PV of salary MUST EQUAL the PV of all expenses).
Develop and submit a spreadsheet with clearly labeled material that is formatted to be printable on 1 page (clearly indicate the stream of salary, expenses during working life and expenses during retirement).
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Cost of retained earnings
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Changing to a corporation.
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Practices to determine if planning was successful
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Calculate stream of expenses possible with assumed income
: Using a hypothetical situation, make calculations to assist in retirement planning (e.g., determine stream of savings necessary for certain standard of retirement). Calculate the stream of expenses possible with the assumed income.
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Proprietorship and changing to a corporation
: Jumpin-JehoSaphats is owned by Jessica Jean (JJ) Sap hats. Jessica wants to incorporate her business but is not sure of the differences between the current form of sole proprietorship and changing to a corporation.
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An investment is expected to provide cash inflows
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Debt–equity ratio and return on equity
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Briefly explain how change in the personal income tax
: Briefly explain how change in the personal income tax rate affects aggregate demand.
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