Full Sail Personal Finance Assignment 4

Personal FinanceThus far this month you have studied how to create, read, analyze and present financialstatements, how to determine when your company will make money for the first time,and how to evaluate capital investment opportunities for your business. Now its time tochange gears and talk about something even more important you! When you graduatefrom Full Sail, youll have some important decisions to make will you learn to work formoney, or learn how to have your money work for you? For most of us the obviousanswer is both. This assignment is designed to make you think about planning for andmanaging your financial future. Finance is all about making smart decisions with yourmoney how to pay off debts, save for the future, and invest wisely so that your moneyreally does work for you. Most decisions regarding how to allocate our money are reallyjust common sense, once we know and understand the key concepts you have nowreviewed in the course.So here is your mission: this Case Study will provide you with some basic assumptionsin terms of your current financial status. You will be faced with a variety of financialdecisions relative to this real world scenario. For this to be a meaningful learningexperience, you must genuinely insert yourself into the scenario, similar to a character inAvatar. No, we dont expect you to be ten feet tall, blue and with a tail! But we do wantyou to make this exercise as real and personal as it can possibly be. This is your money,your life and your future. So consider the implications of your decisions carefully. Pleasedownload the attached case. Given the data provided, please provide responses to theten questions listed below:1. What is the first thing you will do? Explain why that is your top priority. Hint: the backseat will still smell like nachos and beer a month from now.2. As you think about paying down your credit cards, what will your strategy be? Whichone(s) will you concentrate on first? Outline your strategy.3. The HR department called to ask if you will participate in the 401K plan. Its decisiontime. What have you decided? Should you elect to participate, how much do you plan tocontribute annually?4. Your Charles Schwab investment advisor outlines a variety of investment options,which she believes will offer a better return than the current money market fund. You caninvest in any of the following choices, with corresponding current/past rates of return:a. A 5 year Certificate of Deposit yielding 3% APY.b. A bond fund yielding 4%.c. An Income Mutual Fund earning 5%.d. A Growth Mutual Fund earning 12%.e. A stock you have always liked that is currently up 17% this year.f. Gold, which was up 24% in 2009.What are your instructions to your advisor? Why?5. The XYZ Company stock has continued to pay the same $1.50 annual dividend they have every year. The stock is now $20 per share, up from the $15 you paid per share.What is your dividend yield for this investment?6. XYZ Company has just reported an income statement that indicates that OperatingIncome is $2,375,486 and Net Profit is $1,375,486. The Corporation currently has 2.5million shares of common stock outstanding and does not issue preferred stock. Whatare this corporation’s approximate Earnings per Share?7. What can you do to improve your credit score? Be specific.8. If you invest money in the bond fund as outlined in #4 above, approximately how longwould it take you to double your money? What if you invested in the Growth MutualFund?9. Oops! You car just broke down and it will cost $200 to repair it. The tires are almostbare now replacing them will cost $400. Where will you get the $600 to get you carserviced and back on the road?10. Compare and contrast your investment strategy and risk tolerance when you are 20years old, compared to when you are 55.IMPORTANT REMINDER: This is an individual assignment. Students are required touse their own language when writing papers or other assignments. Plagiarism is usinganother authors words or language without putting those words in quotation marks andfailing to give proper credit to the author. Plagiarism also includes changing the wordsfrom a third party source while maintaining the same sentence structure and notproviding proper citation and reference. Consult your course syllabus for more details.Infractions regarding plagiarism will result in a grade of zero for the assignmentand disciplinary action, which may include failure of and repayment for thecourse, suspension or expulsion.