Create a separate forecast

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Reference no: EM133492477

Question: Created a capital budget, retirement forecast, and presentation for a high net worth client. The following information is provided:

Married couple- $250,000 per year income from W-2 form.
Ages 45 and 42, no children.
In addition to the W-2 income they own a business (S-Corporation) and typically see about $100,000 in dividends each year (total between the two of them).
Current retirement savings = $1,500,000.
They contribute the maximum possible to a Simple IRA each year.
They would like to retire at 50 with $2,500,000 in their retirement account.
They will also be continuing ownership in the S-corp and plan to continue to receive the dividends after retirement.
They are looking at the following options from a capital budget perspective (NOTE: they can only choose one):

Purchase a rental property for $500,000. It will create cash flow of $60,000 per year in rent, which will increase by 4% per year over the next 10 years. They then anticipate being able to sell the property for $750,000.
Invest $500,000 in a 10 year 10% coupon bond, paying out dividends semi-annually.
Submit an Excel workbook with the following worksheets:

Capital Budget calculations for both options.
Retirement forecast based on the above information - Create a separate forecast for each of the possible capital expenditure options.
Summary worksheet

Reference no: EM133492477

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