EXECUTIVE SUMMARY FAMILY DESCRIPTION Alan and Angel Young are both 36 years old. Mr. Young recently accepted a new job making $93,000 a year and Mrs. Young is currently unemployed. The Youngs have one children (newborn), a dog, and a Maine Coon cat. Angel is also highly educated in literature and law from prestigious universities. They are both licensed lawyers. The Youngs have been married for eight years. The Extended Family Mr. Young has a mother in her 60s, who is living far away and is modestly self-sufficient. He also has two siblings who are both married and self-sufficient. Alan inherited $400,000 from his late Uncle Fred, who was 100 years old when he died and had worked every day of his life. He has dwindled this inheritance down to $200,000. Mrs. Young has one brother who is married to a wealthy entrepreneur and they have two children. Angel’s mother is a pharmaceutical distributor and lives in another state. She is 60 years old and modestly self- sufficient. Angel’s father lives in the same town as the Youngs and her brother. He is self-sufficient, healthy, and has the utmost faith that the Youngs will become productive members of society. Angel’s Father (Trust #1) Angel’s father set up a trust for the benefit of Mrs. Young. Her brother is the trustee, but the trust is really controlled by her father. The trust regularly distributes $30,000 per year to Angel and from time to time, invades the corpus to buy her a new car or give her money for nonessentials. The balance in the trust is $700,000 and it has an average earnings rate of about 8.5% per year for the last ten years. The trust balance is growing, but there is no sign that distributions will increase. GOALS & CONCERNS 1. They want to have a proper insurance, investment, and estates portfolio. 2. They want their taxes analyzed. 3. They want to know the cost of college education for the newborn, expected to go to college in 18 years, so they can approach Angel’s father about fully funding 529 Plans college savings plan. The current cost of education is $20,000 per year in today’s dollars and the inflation rate is expected to be 7%, while general inflation is 3%. They will fund 5 years of education, and while they don’t know, they expect the 529 Plan’s investment rate of return to be 10%. 4. They want to plan for an early retirement (100% wage replacement ratio, excluding the trust income) at age 62, as they want to spend the autumn of their lives together traveling and visiting friends and family. Alan plans to save $18,000 per year in a 401(k) plan starting this year and to have an employer match of $6,000. They expect to live to age 90. 5. As neither of the Youngs currently have 40 quarters of Social Security earnings and because they are planning to retire at age 62, they do not want to include any Social Security retirement benefits in their planning. 6. They want to be debt free at retirement. INTERNAL INFORMATION THE RESIDENCE The current value of the residence is $550,000. The balance of the 30-year mortgage at 5.5% is $260,514. The land value is $150,000. The monthly payment is $1,703.37 and they have owned it for 8 years. They will not qualify for refinancing until Mr. Young has been employed for 12 months. INSURANCE INFORMATION Life Insurance Neither Alan nor Angel Young currently have any life insurance. Mr. Young expects to have $50,000 of group- term life insurance from his employer. Health Insurance They will be covered under Mr. Young’s employer’s health plan, which is an excellent plan. However, the cost will be $1,000 per month for the family. The lifetime benefit per person is unlimited. Disability Insurance Neither Alan nor Angel Young currently have disability insurance. Mr. Young will have a long-term, guaranteed renewable disability policy, provided by his employer, as of tomorrow for 65 percent of his gross pay, covering sickness and accidents with benefits to age 65. Homeowners Insurance The Youngs have an HO3 policy with endorsements for open perils and replacement value. They have a $250 deductible. The dwelling is covered for $300,000 and they have an 80/20 coinsurance clause. The premium is $2,400 per year. Auto Insurance They have a personal automobile policy (PAP) covering both cars with a $250 deductible for comprehensive and collision. They do not have uninsured motorist as they do not drive much, and both have safe vehicles. The liability coverage is $100,000/$300,000/$50,000. The annual premium is $1,800 for the two cars. INVESTMENT INFORMATION The Investment Portfolio The $200,000 investment portfolio produces variable income from -10% to +15%, depending on the year. It was originally $400,000 but with poor investment returns and expenditures, it has been reduced to $200,000 at this time. Last year’s income, which consisted mostly of dividends, was $8,000. Other Investment Assets The assets in the brokerage account are from gifts from Angel’s father. These assets are invested in a money market account but are currently earning 0%. Mr. Young’s 401(k) assets, which are from when he worked at the consulting firm, are invested in an equity index fund. Risk Tolerance Their portfolio consists of a few energy stocks that generated dividends and capital gains of approximately seven percent. They recognize that they need to modify their asset allocation but are not sure what to do. TAX INFORMATION For the last few years they have been low income tax payers but are uncertain as to this year. ESTATE INFORMATION They have not prepared any estate planning documents. Answer the following questions;

1. Risk Management Prepare an analysis of the Young’s current risk management situation and portfolio using appropriate metrics (benchmarks) from the textbook. Risk Product Metric Actual Recommendations Comments Life Insurance - His 12 - 16 x Gross Pay None Needs $1.5M 30 year term due to level of assets and income Cost $1,080 $.72 per $1000

2. Given the following expected cash flows for two projects, and an opportunity cost of capital of 10%, which project is better and why? (10 points)

            Expected Net Cash Flows

Year    Project A         Project B

0          -$10,000          -$10,000

1          $5000              $0

2          $5000              $0

3          $5000              $8,000

4          $5000              $2,000

3. Given the following expected cash flows for two projects, and an opportunity cost of capital of 8%, which project is better and why? (10 points)

            Expected Net Cash Flows

Year    Project A         Project B

0          -$1,000            -$1,000

1          $500                $50

2          $500                $300

3          $500                $400

4          $500                $2,000

For each of the descriptions of reactions, i – iv, directly below, match one of the statements, A – D. Put the appropriate letter A, B, C or D in the blank provided in front of each reaction description, i – iv.

i) ____ An endothermic reaction in which the products have less entropy than the reactants

ii) ____ An endothermic reaction in which the products have more entropy than the reactants

iii) ____ An exothermic reaction in which the products have less entropy than the reactants

iv) ____ An exothermic reaction in which the products have more entropy than the reactants

A. This describes a reaction that will be nonspontaneous at all temperatures.

B. This describes a reaction that will be spontaneous at all temperatures.

C. This describes a reaction that might be spontaneous or nonspontaneous depending on the temperature. A higher temperature favors a spontaneous reaction.

D. This describes a reaction that might be spontaneous or nonspontaneous depending on the temperature. A lower temperature favors a spontaneous reaction.

Use appropriate relationships from chapter 8 of the textbook to determine the wavelength of the line in the emission spectrum of He+ produced by an electron transition from ni = 7 to nf = 3.

I got 1005nm before but it is apparently incorrect:

This is the correct wavelength for the transition in a hydrogen atom, but this species is the He+ cation which has two protons (Z=2) in its nucleus, and will have an entirely different emission spectrum compared to that of a single electron atom with only one proton. Use the equation

En=−Z2RHn2

where En is the energy of the electron in the nth level, Z is the atomic number corresponding to the number of protons in the nucleus (or total nuclear charge), RH is the Rydberg constant, and n is the energy level, to find the energy of the transition in a single electron species with more than one proton. Then, the wavelength can be calculated once the energy of the transition is known.

1. Cash Payback Method

   Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows:

   Year		Liquid Soap		Body Lotion
   1		$170,000		$ 90,000
   2		150,000		90,000
   3		120,000		90,000
   4		100,000		90,000
   5		70,000		90,000
   6		40,000		90,000
   7		40,000		90,000
   8		30,000		90,000
   Total		$720,000		$720,000

   a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line.
   

   Payback period for liquid soap
   Payback period for body lotion

   b. The project with the_________ net cash flows in the early years of the project life will be favored over the one with the _________ net cash flows in the initial years.

Cash Payback Method

Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows:

a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line.

b. The project with the   net cash flows in the early years of the project life will be favored over the one with the   net cash flows in the initial years.

Cash Payback Method

Lily Products Company is considering an investment in one of two new product lines. The investment required for either product line is $540,000. The net cash flows associated with each product are as follows:

a. Recommend a product offering to Lily Products Company, based on the cash payback period for each product line.

b. The project with the   net cash flows in the early years of the project life will be favored over the one with the   net cash flows in the initial years.

1 What is the difference between primary, secondary, and tertiary sources? Give an example of each.
2 What are the key elements of a research work plan?
3 What is a desktop search tool and how can it help you?
4 What is the effect of using quotation marks around search terms in web or database searches? What happens if you do not use quotation marks?
5 Explain the three criteria for evaluating whether a source is credible.
6 Name two advantages of conducting survey research and two advantages of conducting interview research.
7 Identify at least two ways to find experts you can interview on a topic.
8 What is anecdotal evidence and how may it be useful in your research?
9 What are two benefits of organizing and storing research materials online, in the cloud, rather than just on your computer?

Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg. The cost in dollars of producing a kitchen chair at each of the two plants is given here. The cost of producing Q1 chairs at Aynor is: 25Q1+2.5Q12+100 and the cost of producing Q2 kitchen chairs at Spartanburg is: 75Q2+2.5Q22+150. Andalus needs to manufacture a total of 40 kitchen chairs to meet an order just received. How many chairs should be made at Aynor, and how many should be made at Spartanburg in order to minimize total production cost? If required, round your answers to the nearest whole number. Round intermediate calculations to two decimal places.

Aynor

Spartanburg

Total cost $