By Group 1

Anshul, Priya, Rajpreet, Rohit

Case Presentation

CASE 1
PERSONAL FINANCE BASICS
AND TIME VALUE OF MONEY

Q1. What are the areas of financial concerns that

the Marcotte's are currently facing?

The Marcotte's have several financial planning

issues that need to be addressed.
They need to first address their retirement
needs,
followed by their childrens educational
needs,
the financial needs of their aging parents,
and lastly a financial safety need in case one of
them became unemployed.

Q2. The Marcotte's are making some financial decisions

that will help them in the future. In your estimation, what
are the sound decisions theyve already made?

There are people who suddenly find themselves

unprepared when financial crises strike,
But Marcottes had taken certain financial decisions
that will help them in future. They are
the Marcotte's are saving money in various
investment accounts
starting a savings account,
and contributing to their 401Ks.

Q3. College education is increasing at a rate of 10% per

year. If college cost is running at $22,000 a year today,
what will the Marcottes need to have saved up for Paloma
in 7 years and for Joel in fifteen yearsYou can assume that
the Marcottes earn 6% on their investments. You can use
the financial calculator at www.kiplinger.com to find the
answer. Find calculator on the website and use the
planning category. Assume that the Marcottes can only
save $100 a month towards each childs
educationalfunding

For Paloma: Given an inflation rate of 10.0%, the yearly cost of college after 7 years will be $42872,
and the total amount the Marcottes will be save with his current saving plan will be
10677 after 7 yrs and he lacks by $32195. so by this he hav to save total $580 to pursue
Palomas education.
For Joel: Given at inflation rate of 10%, the yearly cost of college after 15 yrs will be $91900 and
the total amount Marcottes will save for his son with current plan will be $29582after 15
yrs and he will be lacked by $62318. so he hav to save $1030 per month to match the
requirement of fees for both the children.

Q4. What is the opportunity cost for the family while Luz is
pursuing her Doctorate in Psychology?
.

Luz is a full-time employee at her place of

employment.
She is hopeful she will have a higher salary in the
future due
to her advanced degree.

CASE 2
FINANCIAL ASPECTS
OF CAREER
PLANNING

Q1. What is the opportunity cost that Mrs. Marcotte needs to

consider as she contemplates her future career

Mrs. Marcotte may want to think about the satisfaction

that she will attain in her field with an advanced degree
vs. the money she would make in some other career, or
the cost of getting the Doctorate.
She will also have to consider the demands that will
come with a promotion, and how it will affect her time
with her family.
Moreover, she will have to consider how her career
choices will affect her family if they have to relocate .

Q2. Mrs. Marcotte has some friends and distant family in both
Birmingham, Alabama, and Denver, Colorado. Go to the website
www.homefair.com and click on the Salary Calculator to determine what
would be the comparable salary, she will have to make if she moves
from Leawood, Kansas to these cities. Her current salary is $53,000.

If her current salary is $53,000, she will have to

make $44612 in Birmingham, Alabama, and
$56,299 in Denver, Colorado in order to maintain
their current standard of living.

Q3. As she researches her career prospects, what information

sources should Mrs. Marcotte's reference?

Luz Marcotte should reference the following

sources as she contemplates her future career
move:
Mass media career information
World Wide Web
Business magazines
Career development office
Career event calendars
Community organizations
Professional associations
Trade associations (Business contacts)

Q4. An important part of any career move is the financial aspects

of the benefits one gets. What methods should Mrs. Marcotte's
use when comparing benefits between different offers?

When comparing benefits, Mrs. Marcotte needs to

use Market Value calculations of the benefits, or
the Future Value i.e whether her future ll be
secure or not.
Consider the tradeoff between the different
jobs.
She also needs to consider the tax implications of
her benefits.

Q5. What are the techniques that Luz Marcotte should keep in
mind, as she prepares herself for her career advancement?

Assess and research personal goals, abilities and career

fields.
Evaluate the enjoyment market, Identify employment
opportunities.
Evaluate the position which has been offered to her.

Mrs. Marcotte has already taken the initiative to pursue an

advanced degree in her field.

Besides this, she needs to take advantage of any training

opportunities that are offered at work, and any other
informal education during her professional development.

CASE 3
MONEY MANAGEMENT
STRATEGY: FINANCIAL
STATEMENTS AND
BUDGETING

Q1 What items might the Marcottes consider

reducing to cope with potential financial difficulties?
There are number of things that the Marcottes
might want to consider.
Some of them may or may not be feasible,
depending on what the family values.
Marcottes here need to prepare the mental budget.
OPTION 1: Move into home with a cheaper
mortgage payment.
-In terms of food, they should only get what they
need
-The clothing cost can definitely be pared down. Again this is the condition where name brands
must be avoided.
-Savings from auto vehicles.
-Convert the policy to lower coverage policy.

Q2. How should the Marcottes use their savings and

retirement funds during this financial crisis? What additional
sources of funds might be available to them during the period
of unemployment?
If the Marcottes greatly reduce their spending and liabilities, they may
not have a great need to tap into their various savings funds.

They should wait as long as possible before dipping into their savings.

If things start getting too hard financially, they may want to consider
tapping into the college fund first.
The kids will have other options available to them for future college
payments.
The retirement fund should be left alone completely unless a very
extreme financial crisis occurs.
Another option for quick cash in an extreme situation is to liquidate some
assets.

3. What other current and future financial actions

would you recommend to the Marcottes?
One recommendation for the Marcottes is to start an emergency
savings fund once they get back on their feet.
This would greatly reduce the problems that come with the
situation they are in, should it happen again.
In addition, they may want to continue being thrifty even after
things go back to normal.
It would also be advisable for them to assess whether future
purchases are wants or needs. Is it completely necessary?
The Marcottes should also brainstorm various forms of
entertainment that are cheap or even completely free of charge.

THANK YOU