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Question

Sylvia has tracked her expenses for the last six months and provides you with the following estimates for the

year:


Mortgage payments, including property taxes and interest $5,886

($3,094 is interest)

Groceries $3,600

Holidays $3,500

Car payments, including interest $4778

($958 is interest)

Utilities $3,000

House and car insurance $1,600

Gas for auto $2,200

Auto maintenance $600

Life and disability insurance premiums $400

House maintenance $1,500

Household expenses $600

Medical and dental expenses $400

Entertainment and lunches $5,500

Gifts $1,400

Clothing $3,400

Miscellaneous expenses $3,200


Sylvia has the following assets:


House value $100,000

Cash in the bank $1,800

Canada Savings Bonds $8,000

Furnishings and personal assets $18,000

Auto $20,000

RRSP $28,500


Sylvia has the following debt:


Credit card balances owing $2,800

Line of credit owing $5,000

Mortgage $62,000

Car loan $18,500


Required:

a. What is her net worth statement?

b. What is her annual cash flow statement?

c. Sylvia also has plans for saving and investing, and wants to find a way to "pay herself first." She is willing to make adjustments to her spending habits and would like to see the effect of putting away 10% of her net pay for investing. Incorporating her ideas, what could her future cash flow budget look like?


 

Top Answer

a.Net worth = $88,000... View the full answer

1.png

A
B
C
Annual cash flow statement
2 Cash inflows
3
Income
50000
4
Less: Income tax& deducion
15000 50000*30%
5 Add: Interest income
400
Total cash inflow
35400
7
8
Cash outflows:
9
Mortgage...

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