FIN 422 Experience Tradition- tutorialrank.com

1. FIN 422 Entire Course For more course tutorials visit www.tutorialrank.com FIN 422 Week 1 Financial and Retirement Calculators FIN 422 Week 2 Team Retirement Plans FIN 422 Week 2 A Recommendation for Ed FIN 422 Week 2 Textbook Problem FIN 422 Week 3 Team The Employer’s Choice FIN 422 Week 4 Restructuring a Healthcare Plan FIN 422 Week 4 Team Employee Retirement Plan Development

2. FIN 422 Week 5 Team Presenting to the CEO FIN 422 Week 5 A Plan for Jonathan (2 Papers) FIN 422 Week 3 Textbook Problems (Page 128 Problem 3,4,20) FIN 422 Week 3 Textbook Problems (Page 150 Problem 8,9,10,11,12,13) FIN 422 Week 4 Textbook Problems (Page 325 Problem 1,2,3) FIN 422 Week 5 Textbook Problems (Page 351 Problem 2,3) ============================================== FIN 422 Week 1 Financial and Retirement Calculators For more course tutorials visit www.tutorialrank.com

3. This site provides several calculators important for financial and retirement planning. Topics include saving for college, doubling your money (Rule of 72), power of tax deferral, and the longevity game. You can also access another similar website if you choose to do so. Write a 700- to 1,050-word paper discussing quantitative methods used to plan retirements and other future financial obligations. Analyze each calculator and develop conclusions about its relevance to retirement planning. Consider your life expectancy and the variables that can affect life spans. Click the Assignment Files tab to submit your assignment as a Microsoft® Word document. ============================================== FIN 422 Week 2 A Recommendation for Ed For more course tutorials visit www.tutorialrank.com Read the following scenario:

4. Ed started his business a year ago and has two employees. He has been steadily increasing his revenues and feels comfortable offering a retirement benefit plan for him and his two employees. His employees wish to make voluntary contributions. Ed is concerned about future cash flows in the event of a business downturn, as well as growing pains that may accompany future expansion. Ed has asked you to recommend a retirement plan for his business. Develop a recommendation for Ed among SIMPLE, Keogh, SEP and Money Purchase/Targeted Plan in 525 to 700 words. Defend your choice. Click the Assignment Files tab to submit your assignment as a Microsoft® Word document. ============================================== FIN 422 Week 2 Team Retirement Plans For more course tutorials visit www.tutorialrank.com

5. Discuss within your teams each member’s current or previous employers’ sponsored retirement plan. Do not refer to your company by name if the information is considered proprietary. Write a 700- to 1,050-word summary or a spreadsheet that addresses the following: • Describe types of plan features (i.e. vesting, eligibility, entry dates, retirement dates, etc.) and estimate whether or not these features are valuable. • Analyze the fees associated with the plan, and explain how are they paid. • What investments are available? • What other features and opportunities does the plan provide? • Choose one plan that you would like to further analyze over the next few weeks. Briefly address the strengths and shortcomings of this plan. (If you are creating a spreadsheet, complete this portion by submitting a 90 to 175 word summary). Click the Assignment Files tab to submit your assignment as a Microsoft® Word document. ============================================== FIN 422 Week 2 Textbook Problem

6. For more course tutorials visit www.tutorialrank.com Week 2 Textbook Problems Page 128 Problem # 3 Your company currently offers a defined benefit plan using the following formula for retirement benefits at age 65: final average pay, years of service, and a 2 percent replacement income factor. There is a 2 percent actuarial reduction per year for retirement between the ages of 55 (the earliest date on which one can retire) and 65. There is no actuarial cost for the mandatory 50 percent spouse option arising from age variations between the spouses. Your CFO considers the plan too costly. You decide to keep the DBP as is for your current employees, but offer a modified DBP for new hires. The new hire plan will continue to encourage long and productive service, but will reduce the cost to the company. Briefly identify and describe three appropriate design changes you would make for the new hire plan that would best generate these results. Page 128 Problem # 4 An executive of a company that offers a traditional and qualified defined benefit plan is now 65 years old and applies for retirement. His average final pay is $150,000 and his average final bonus is $75,000. The DBP uses a 2 percent income replacement factor, credits for all years of service, and allows for full retirement at age 65. The executive has 30

7. years of service and is fully vested. Calculate the pension he will receive from the qualified defined benefit plan. Page 128 Problem # 20 Suppose two persons retire from the same company and are participants of the same DBP. Their calculated annuities are the same, but when they elected instead to receive lump sums, the amounts were different. What is the most likely reason for this difference? ============================================== FIN 422 Week 3 Team The Employer’s Choice For more course tutorials visit www.tutorialrank.com Apply the information within the employer retirement plan chosen in Week 2. Create an 8- to 10-slide presentation from the point of view of the employer presenting to colleagues and decision-makers within the organization. • Assume you are trying to recruit workers and are using this plan as a key component of your offer package.

8. • Choose a hypothetical employee target (i.e. recent college grad, middle manager or CEO). Analyze how your plan is competitive in terms of providing an important life event benefit. • Determine whether your hypothetical employee will have enough money to retire using your plan. Click the Assignment Files tab to submit your assignment. ============================================== FIN 422 Week 3 Textbook Problems (Page 128 Problem 3,4,20) For more course tutorials visit www.tutorialrank.com Page 128 Problem # 3 Your company currently offers a defined benefit plan using the following formula for retirement benefits at age 65: final average pay, years of service, and a 2 percent replacement income factor. There is a 2 percent actuarial reduction per year for retirement between the ages of 55 (the earliest date on which one can retire) and 65. There is no

9. actuarial cost for the mandatory 50 percent spouse option arising from age variations between the spouses. Your CFO considers the plan too costly. You decide to keep the DBP as is for your current employees, but offer a modified DBP for new hires. The new hire plan will continue to encourage long and productive service, but will reduce the cost to the company. Briefly identify and describe three appropriate design changes you would make for the new hire plan that would best generate these results. Page 128 Problem # 4 An executive of a company that offers a traditional and qualified defined benefit plan is now 65 years old and applies for retirement. His average final pay is $150,000 and his average final bonus is $75,000. The DBP uses a 2 percent income replacement factor, credits for all years of service, and allows for full retirement at age 65. The executive has 30 years of service and is fully vested. Calculate the pension he will receive from the qualified defined benefit plan. Page 128 Problem # 20 Suppose two persons retire from the same company and are participants of the same DBP. Their calculated annuities are the same, but when they elected instead to receive lump sums, the amounts were different. What is the most likely reason for this difference? ==============================================

10. FIN 422 Week 3 Textbook Problems (Page 150 Problem 8,9,10,11,12,13) For more course tutorials visit www.tutorialrank.com Page 150 Problem # 8 Page 150 Problem # 9 Page 150 Problem # 10 Page 150 Problem # 11 Page 150 Problem # 12 Page 150 Problem # 13 1. Assume you have contributed to your 401(k) for 30 years and have an account accumulation of $800,000. What annual income would this yield for the remainder of your lifetime when you retire next month as age 65? What are your assumptions? 2. What is a Roth IRA and how does it differ from an IRA? Check http://www.ira.com/ for the answers and be prepared to discuss why and when you would select one or the other.

11. 3. With respect to retirement planning, we must remember there are three legs to the stool and one is Social Security. How much can you expect to receive from Social Security? Check http://www.ssa.gov/ and go to Benefit Calculators. Then calculate your hypothetical Social Security benefit at the appropriate retirement age. Also, be prepared to discuss average indexed monthly earnings, primary insurance amounts, bend points, and monthly benefit amounts. 4. You are a small employer with 85 employees. Recruiting and retention factors lead you to conclude that you should offer some type of retirement plan for your employees. Identify and briefly describe an optimal plan that would best support your HR objectives and minimize your administrative expense. 5. Your friend indicates he has opened an IRA account and funded it with tax-free municipal bonds. Is this a good strategy? Explain. What should his investment strategy be with respect to an IRA? Would it be different for a Roth IRA? What are the adjusted gross income limits for regular and Roth IRAs? (See http://www.dol.gov.) 6. Your older friend is considering retirement and wants to know if and when she can get the green light to notify her employer. Go to http://www.choosetosave.org/ballpark/ and select Interactive Ballpark. Make two sets of assumptions for each category. Describe what you did and discuss the different results.

12. ============================================== FIN 422 Week 4 Restructuring a Healthcare Plan For more course tutorials visit www.tutorialrank.com Write a 525- to 700-word summary on the ways in which restructuring a health care plan can produce real financial returns. Consider and apply your knowledge of the costs and the benefits of changes and how these may boost productivity. Click the Assignment Files tab to submit your assignment as a Microsoft® Word document. ============================================== FIN 422 Week 4 Team Employee Retirement Plan Development

13. For more course tutorials visit www.tutorialrank.com Read the following scenario: Several employees in your company have started asking questions about how much they should save in their retirement plan. Since your department has been overwhelmed by the number of questions, your manager asks you to develop an interactive decision support program for employees. Specifically, she wants to make sure the participants understand the probable percentage of replacement income their accounts will yield at retirement. Applying the information from the plan chosen in Week 2, create an 8- to 10-slide presentation or brochure where you address the following: • Integrate various factors and variables needed in calculating an employee’s final account balance and relation to final pay; • Hypothesize how you might use the results to consider a possible modification of the plan design; • Decide which data you might need from the participants to better assess possible plan strategies; • Decide which additional data you might provide to participants;

14. • Describe a basic method you would use to assess whether the plan is achieving its intended results, such as enhancing recruitment, ensuring employee satisfaction, and improving overall productivity. Click the Assignment Files tab to submit your assignment. ============================================== FIN 422 Week 4 Textbook Problems (Page 325 Problem 1,2,3) For more course tutorials visit www.tutorialrank.com Week 4 Textbook Problems Page 325 Problem # 1 Queen City Treating is a metal treating company that hardens prefabricated metal products for automobile accessories, including seat belt buckles, wheel rims, radiator caps, and other items. The company is experiencing some serious cost problems. Foreign competition, which uses better technology and has different cost structures, is taking away some of Queen City’s customers by offering lower prices. As a result,

15. Queen City is scrutinizing all of its costs. The CFO has concluded that one area that needs revamping is the high labor cost of the senior workers. The company is considering a voluntary buyout of these workers, in which they would be offered a financial incentive to leave the company before their normal retirement age. Company statistics indicate that 30 percent of the workforce has over 25 years of service and is earning the top rate of pay. The total wage difference among the highest and lowest paid production workers is about $8 per hour, and the company utilizes about two million labor production hours per year. Management believes that replacing these more senior and higher paid workers with persons at lower rates of pay would significantly improve the costs and productivity of the business. (a) From a labor economics standpoint, are older workers more expensive? What factors would you use to assess this issue? (b) If more senior employees leave the company, could there be a reduction in productivity? How would you calculate productivity? If there is a reduction, how long would it persist? What steps might be taken to mitigate this problem? (c) Are there viable alternatives to the voluntary buyout that would achieve the desired cost reduction? What is a range of possible solutions? How would you measure their effectiveness? (d) Describe in some detail the optimal plan design to encourage voluntary separation of the senior employees.

16. (e) How would you determine the likelihood of your plan succeeding? How would you define success and how would you measure it? (f) What assessments would you make in choosing a method to reorganize and restaff the company after the reduction plan is implemented? Page 325 Problem # 2 Wal-Mart has been expanding its construction of super centers, which include major food sections encompassing general grocery items, health and beauty aids, perishable produce, meat, seafood, frozen food, and deli items. The company is nonunion with labor costs at about 7.5 percent of sales versus its organized competitors’ 13 percent. This, in part, allows Wal-Mart to offer prices anywhere from 6 to 10 percent below its supermarket competitors. Price sensitivity in the business is important and an overall price difference above 2 percent will cause loss of market share. You work for one of the organized companies and your CEO has directed you to begin an initiative to reduce your wage and benefit costs to be in line with Wal-Mart’s levels. You know that negotiating lower wages and benefits with your unions will be a difficult task. While you have not abandoned that idea, you have decided to take a broader approach to reducing overall costs and enabling your company to offer prices that meet Wal-Mart’s. (a) Describe a range of possible solutions that does not necessarily involve reducing the level of benefits and wages, but might serve to reduce the ratio of labor costs to sales and would be consistent with the

17. overall business strategy of building sales and profits through top service, competitive prices, and great product variety. (b) What analytical steps, metrics, and assessments would you apply to each? (c) Are there possible total reward solutions that might help to attain your objective? Briefly identify them and explain. (d) How would you measure and evaluate each? (e) Select a comprehensive plan that you believe will enable your company to be price competitive without changing the level of benefits and wages. (f) Describe how you would measure and evaluate your plan. Page 325 Problem # 3 Your company designs and makes electronic counting and control devices for manufacturers. It employs 300 people in the Midwest and has been in business on a privately owned basis for nine years. The industry is competitive, and your company must preserve an edge in getting new products to market faster than others, maintaining a high- quality product, offering good and sustained service to its customers, and selling at a competitive price. The company offers a privately insured health care plan, among other benefits and rewards, for all employees and their dependents. It is a traditional indemnity plan design

18. and the cost as a percentage of total employee compensation has increased from 16 percent to 25 percent over the last two years. There is no cost to the employees for their health care. Your competitors are sponsoring much less expensive plans. Your CEO has asked you for a complete review of the health care plan and to create a design that is in line with the business strategy, is cost-effective, provides employees with choice and quality, and helps recruit and retain employees. (a) What analytical, research, data collection, and assessment steps would you undertake to fulfill this assignment? Explain in detail. (b) Can you link your health care plan to a potential increase in productivity? How? How would you measure? (c) With respect to quality, how would you make sure this element remains an integral part of your plan? How would you measure it? ============================================== FIN 422 Week 5 A Plan for Jonathan (2 Papers) For more course tutorials visit

19. www.tutorialrank.com Write a 750- to 1,050-word paper on the following scenario: Jonathan owns and operates a deli restaurant in New York City. It is a family business and all of the employees are family members. Jonathan wants to establish a retirement plan so he can save for retirement and the retirement of his employees on a tax deferred basis. Jonathan only wants to contribute to the plan when the business makes a profit. He is happy to contribute on behalf of his employees if the business is doing well. He wants to limit administrative fees. You have been hired to recommend a plan for Jonathan. Complete the following: • Apply the financial planning concepts we have learned in this course to guide Jonathan on the fiscal planning he must do to determine when it would be appropriate to make retirement contributions for himself and his employees. • Evaluate the different retirement plans available to Jonathan and recommend appropriate choices. • Examine the risks associated with your recommendation and the ways Jonathan can mitigate these. Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.

20. ============================================== FIN 422 Week 5 Team Presenting to the CEO For more course tutorials visit www.tutorialrank.com Read the following scenario: After the recruitment event in Week 3, your CEO has asked for recommendations to enhance the retirement plan offered by your company, which has 500 diverse employees. Create an 8- to 10-slide presentation that makes recommendations for the following: • Onsite daycare. • Wellness program. • Employee stock option plan, and/or profit match to the retirement plan. Click the Assignment Files tab to submit your assignment. ==============================================

21. FIN 422 Week 5 Textbook Problems (Page 351 Problem 2,3) For more course tutorials visit www.tutorialrank.com Page 351 Problem # 2 Your employer has awarded you 3,000 shares of SARs with a strike price of $20 per share. When SARs are exercised, the company converts the gain and compensates the employee with shares of company stock. The SARs have a five-year graduated and equal vesting schedule and a ten-year term. On the third anniversary of the grant, the market price is $25 per share and you decide to exercise your SARs. (a) Briefly explain the tax consequences, if any, of your exercise. (b) Briefly explain how you would calculate the “spread” owed to you on exercise. (c) Briefly explain how you would calculate the number of shares you would receive. Page 351 Problem #3 You have received a grant of 2,000 NQSO shares. They vest on a graduated basis over a five-year period. The strike price was $10 per share. It is now three years since the grant and the current price is $20 per share. You decide to exercise on a cashless basis. (a) How many shares can you exercise? (b) What will be your “pretax” gain on the exercise? (c) How will the options be taxed? (d) Assume the price has

22. increased only $0.50 since the grant. What financial reason would there be to exercise now? ==============================================