Ruth, age 25, has recently decided to switch from working full-time to full- time studying in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Ruth, age 25, has recently decided to switch from working full-time to full- time studying in order to get her bachelor's degree in Accounting and Finance. Having the Higher Diploma qualification, Ruth aims to complete her bachelor's degree in 2-years of full-time study. Ruth has resigned from her current position, but her employer allows her to switch from full-time to part-time job at the back-office of a bank. The part- time job requires her to work 12-hours per week at the bank's back-office with a weekly part-time wage of $900. Ruth lives at home and her parents pay for all the living expenses such as rent and utilities. Currently, she has no debts or outstanding balances under her credit card. However, Ruth will apply student loan to cover her tuition fees for going to university. Also, she will use her past saving and part-time income to pay for her daily expenditure and other study costs, for examples, books; notebook computer; cost of optional student exchange programme, etc. Ruth's favourite pastime is baking. She enjoys making bread at home and baking cakes for parents' and friends' birthdays. She dreams of opening her own cake shop after completing her bachelor's degree and repaying all her student loans. a Suggest TWO opportunity costs that might be considered in Ruth's case, that is, switching from working full-time to full-time studying. 4 marks b. To finance her full-time study, Ruth decided to apply for a bank loan and has received the following two quotes respectively from WFG Bank and MPL Bank: WPG Bank charges 9.6% compounded monthly on the bank loan whilst MPL Bank charges 9.8% compounded semiannually on the bank loan. By comparing the effective annual rate (EAR), as a potential borrower, which bank will Ruth go to borrowing the bank loan? 4 marks c. Given Ruth's situation, identify one short-term financial goal and one long-term financial goal for her. Briefly explain your choice. 4 marks d. Identify and explain THREE risks that Ruth might encounter when making financial decisions over the next few years. 6 marks e. Ruth has deposited all her saving $100,000 in a bank account which pays 6% interests compounded quarterly. Ruth plans to withdraw equal amounts from her saving account at the end of each quarter in the next two years to pay for her study costs. Assume that Ruth will make her first withdrawal in next quarter, what is the most Ruth can withdraw quarterly? Ruth, age 25, has recently decided to switch from working full-time to full- time studying in order to get her bachelor's degree in Accounting and Finance. Having the Higher Diploma qualification, Ruth aims to complete her bachelor's degree in 2-years of full-time study. Ruth has resigned from her current position, but her employer allows her to switch from full-time to part-time job at the back-office of a bank. The part- time job requires her to work 12-hours per week at the bank's back-office with a weekly part-time wage of $900. Ruth lives at home and her parents pay for all the living expenses such as rent and utilities. Currently, she has no debts or outstanding balances under her credit card. However, Ruth will apply student loan to cover her tuition fees for going to university. Also, she will use her past saving and part-time income to pay for her daily expenditure and other study costs, for examples, books; notebook computer; cost of optional student exchange programme, etc. Ruth's favourite pastime is baking. She enjoys making bread at home and baking cakes for parents' and friends' birthdays. She dreams of opening her own cake shop after completing her bachelor's degree and repaying all her student loans. a Suggest TWO opportunity costs that might be considered in Ruth's case, that is, switching from working full-time to full-time studying. 4 marks b. To finance her full-time study, Ruth decided to apply for a bank loan and has received the following two quotes respectively from WFG Bank and MPL Bank: WPG Bank charges 9.6% compounded monthly on the bank loan whilst MPL Bank charges 9.8% compounded semiannually on the bank loan. By comparing the effective annual rate (EAR), as a potential borrower, which bank will Ruth go to borrowing the bank loan? 4 marks c. Given Ruth's situation, identify one short-term financial goal and one long-term financial goal for her. Briefly explain your choice. 4 marks d. Identify and explain THREE risks that Ruth might encounter when making financial decisions over the next few years. 6 marks e. Ruth has deposited all her saving $100,000 in a bank account which pays 6% interests compounded quarterly. Ruth plans to withdraw equal amounts from her saving account at the end of each quarter in the next two years to pay for her study costs. Assume that Ruth will make her first withdrawal in next quarter, what is the most Ruth can withdraw quarterly?
Expert Answer:
Answer rating: 100% (QA)
a 1 The opportunity cost of fulltime studying is the time spent studying which could be used for working and earning an income 2 The opportunity cost ... View the full answer
Related Book For
Posted Date:
Students also viewed these economics questions
-
For the current year, Accord Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the change...
-
For the current year, Packers Company decided to switch from the indirect method to the direct method for reporting cash flows from operating activities on the statement of cash flows. Will the...
-
Jamie Lee Jackson, age 24, has recently decided to switch from attending college part-time to full-time in order to pursue her business degree, and aims to graduate within the next three years. She...
-
pick 1 1 point A small island nation has license plates that consist of 2 letters ( \( A-Z \) allowed) followed by 3 numbers (0 \( -9 \) allowed). How many plates are possible that do not repeat the...
-
Where can a security administrator find information on established security frameworks?
-
The perimeter of a rectangle is 40inches. The area of the rectangle is 96 square inches. Use a system of equations to find the dimensions of the rectangle.
-
Locate a sample pretrial order. What does the sample you located include? How does it compare with the sample provided in Exhibit 17.2?
-
An investor bought common stock of Microsoft Corporation on three occasions at the following prices. Calculate the average price per share at which the investor bought these shares. Date January 2009...
-
What is required to solve this problem? Scenario Analysis Sales and NPV numbers are in $ Mil Scenario probability Byproduct Sales NPV IRR Base 40% $80.00 $ - Byproduct sales decrease by 10% 30%...
-
A loan of $7,419 was repaid at the end of 14 months. What amount of repayment check (principal and interest) was written, if a 4.7% annual rate of interest was charged?
-
Describe the error in the conclusion. Given: There is a linear correlation between the number of cigarettes smoked and the pulse rate. As the number of cigarettes increases the pulse rate increases....
-
Go to www.sec.gov/ and click on Press Releases. a. Summarize the major types of issues that the SEC addresses in these press releases. b. Review the past three months of releases, and count how many...
-
Go to http://www.soxlaw.com/. This site tracks issues and news related to the Sarbanes-Oxley Act. a. Summarize in two or three sentences the primary reason for the passage of the Sarbanes-Oxley Act....
-
You have been out of school and gainfully employed for 5 years. You have three alternatives available for investment with your own money. Each has some element of risk, although some are safer than...
-
The Federal Reserve has a listing of the nonconventional policy tools used for liquidity provision at https://www.federalreserve.gov/monetarypolicy/ expiredtools.htm. Of those tools, which one was...
-
Brenda Johnson is considering purchasing a new car for business purposes. She has narrowed her choice to three cars; the cost details are given below: Brenda estimates she will travel about 4,000...
-
Keys Corporation's 5-year bonds yield 6.90% and 5-year T-bonds yield 4.40%. The real risk-free rate is r* = 2.5%, the inflation premium for 5-year bonds is IP = 1.50%, the liquidity premium for Keys'...
-
Saccharin is an artificial sweetener that is used in diet beverages. In order for it to be metabolized by the body, it must pass into cells. Below are shown the two forms of saccharin. Saccharin has...
-
Explain how the capital budgeting analysis in the previous question would need to be adjusted if there were three possible outcomes for the British pound along with the possible outcomes for the...
-
The treasurer of Glencoe, Inc., detected a forecast bias when using the 30-day forward rate of the euro to forecast future spot rates of the euro over various periods. He believes he can use this...
-
If you are a U.S. importer of Mexican goods and you believe that todays forward rate of the peso is a very accurate estimate of the future spot rate, do you think Mexican peso call options would be a...
-
The processes in the Carnot cycle are carried out in a/an (a) Reversible fashion (b) Irreversible fashion (c) Neither (a) nor (b) (d) Both (a) and (b).
-
For a gas whose \(P-V-T\) behaviour is given by \(Z=1+\frac{B P}{R T}\), where \(B\) is a constant, the fugacity coefficient is (a) \(\frac{B P}{R T}\) (b) \(\exp \frac{B P}{R T}\) (c) \(\ln \frac{B...
-
The substance which has a fixed chemical composition throughout is called a/an (a) Colloid (b) Inert substance (c) Pure substance (d) Ideal substance.
Study smarter with the SolutionInn App