1. Forever 21 Clothing Company has 116 employees in their Philippine Operations. The average salary of each employee is Php 25,000.00. For the fiscal year November 1, 2021 to October 31, 2022. the Finance Department decided to accrue the 13th month pay of their employees. As the Accounting Head of Forever 21 Clothing Company. where will you invest the monthly accruals to maximize the earnings.

1. How much is the monthly accrual on November 30, 2021?

2. How much is the total payout for all the employees on October 31, 2022?

3. How much is the additional earnings for the company if your accrual is invested in Fixed Income securities, assuming that the average rate of return is 6% per annum?

2. Enrique (28) and Liza (27) is a young married couple, with 2 children, ages 4 and 2 years old. Both are working, earning a combined household income of Php 45,000.00 per month net of income taxes. They are living with relatives (rent-free). BUT would like to get their own house and lot some day. Checking the real estate market at present, they estimated that a home they wish to have would cost them Php 4M pesos in 2032 (after computing for cost adjustments). Typically. a 20% DP is required in getting a property, and the remaining balance payable in 15 years. They currently have a joint savings account of Php 600,000.00. The family expenses in a month is Php 25,000.00 with no debts. They want to prepare for this purchase, and buy a home 10 years from now.

1. How much is the DP and estimated monthly amortization for 15 years? (use Home Loan Calculator and select the interest rate of 6.28% fixed for 4-5 years.)

2. Where will they put their Php600K-savings to maximize the earnings, and what can you recommend to the couple for the Php25k savings each month?

3. After deciding on where to invest the money, how much will be the total earnings in 10 years, net of taxes (all other fees waived), assuming they will not take out any amount, and have the interest compounded as well. (You may use the simple Investment Calculator). In 2032, can they afford the DP? Amortization? Will there be any cash left for them to re-invest?