Can you help answer the question under this case study. This is Personal wealth management case study.

Assessment task Question 1: Case study You are a financial adviser and the following information is an extract of data you gathered as part of fact finding during an initial client consultation for married couple Peter and Candice Lau. Candice works as an interface designer for the government and Peter works as a nurse for a private hospital. Peter and Candice would like to know how much money they will receive after paying tax and expenses for the year ended 30th June 2016. They would like advice on how to reduce their tax liability in the future. Candice and Peter are expecting their first child next month. They would like financial advice to decide how to the care for the child. Peter is deciding whether he can switch to part time work to care for their child. He has two options: o Return to work full time and earn $54,000 p.a. salary but incur day care fees of $24,220 per year (after the Child Care Rebate has been deducted) o Return to work part time and earn $27,000 p.a. salary but incur day care fees $6,344 per year (after the Child Care Rebate has been deducted) Candice's parents will invest $2000 in an investment bond (tax free) account for the child when it is born. Candice's parents have agreed to put in an addition $500 a year for the first 10 years and $600 for the next 10 years. Candice and Peter want an estimate of how the investment will be worth 20 years from now, if it is invested in either two investment options: o AMP Moderate Fund - Medium risk- Expected return of 4.08 % p.a. o AMP Specialist Australian Share Fund- High risk- Expected return of 5.48% p.a. Income for year ended 30th June 2017: Income type Amount Gross Salary income- Candice Lau $98,000 Gross Salary income- Peter Lau $54,000 Interest -Savings Account $250 Dividend- ANZ Shares $350 (Imputation Credit $150) Dividend- James Hardie Shares $160 (Imputation Credit $60) Distribution- UBS Bond Fund $1,250 Distribution- APN Asian REIT $640 2 Expenses for the year ended 30th June 2017 Item Amount Rent (450 per week).... ...................................... 23,400 Electricity/Water/Gas ........................................ 1,140 Telephone/Mobile ............................................ 1,800 Pay television/Internet ....................................... 1,100 Insurance - home/contents .................................. 1,200 Insurance - car ............................................... 3,075 Credit cards repayment ($500 a month for 12 months). 6,000 Car loans repayment ($8000 a year for 5 year term)..... 8,000 Petrol/maintenance ........................................... 6,500 Car registration ................................................ 720 Public transport ............................................... 2,800 Other expenses 13,500 Food ............................................................ Clothing/Haircuts/Beauty ................................... 4,500 Medical/Dental ................................................ 2,500 Entertainment/Dinners ....................................... 6,000 Prof. Nurse Membership (Peter).................................. 1,000 Gifts - Birthdays/Christmas ................................. 5,000 88,235 Total ........................................................... Current Assets and Liabilities 30th June 2017 Assets (Ownership) Current valuation $ Liability (Ownership) Current valuation $ Home Contents (Joint) 20,000 Credit cards (Joint) Includes the annual interest cost 6,000 Car (Joint) 55,000 Car loan (Joint) 5 year term at 12% 30,000 InvestmentsSavings Account (Joint) ANZ Shares (Candice) James Hardie Shares (Candice) UBS Bond fund (Candice) APN Asian REIT (Peter) Superannuation -Peter -Candice 10,000 6,000 6,000 35,000 10,000 35,000 20,000 3 Required: A. Calculate Peter and Candice's after-tax income and savings ratio for the year ended June 2017. Explain one way in which Peter and Candice could reduce their tax liability and show the effect this strategy would have. B. Using the income and expense figures for year ended June 30th 2017, calculate Peter and Candice's cash surplus/deficit for the two options of caring for their child outlined above. Explain to Peter the implication that part time work will have on his superannuation and retirement funds. C. Calculate the amount that will be saved in the investment bond 20 years from now. Explain whether you think the Moderate Fund or Specialist Australian Share Fund is the better investment and why (information on each fund is available on blackboard). Each question is worth 5 Marks with 2.5 marks being allocated for calculations and 2.5 being allocated for the analysis. (5 + 5 + 5 = 15 marks) Financial Formulae Savings ratio = savings (or cash surplus) net income after tax n Future value FV = PV(1 + i) Annuity (Future value) FV = PMT[(1 + i)n - 1] i Question 2: Infographic/poster You are required to design an infographic/poster that would be used on financial planner's website or displayed in their office. The purpose of the infographic/poster is to explain to investors the key similarities and differences between investing in exchange traded bonds vs. ordinary shares. The poster should be self-explanatory and contain real information. So you need to conduct additional research and you may want to compare two actual investments. Make sure to reference your sources in the poster. The aim of the poster is to communicate essential information about exchange traded bonds and ordinary shares to an audience with limited financial knowledge on this topic. 4 Here are some useful website references: Infographic/poster websites: https://piktochart.com/ Otherwise, you can use Adobe Photoshop or PowerPoint to design the infographic/poster. Website for exchange traded bonds: https://xtbs.com.au/ Websites for shares: http://www.asx.com.au/products/shares.htm https://www.moneysmart.gov.au/investing/shares Submission of assignment: The infographic/poster can be submitted as an image or by providing a web link. It is your responsibility to ensure that the examiner can accurately view the poster/infographic. (15 Marks) Important Note: While answering questions that involve calculations, you are expected to describe your approach and explain your calculations. If assumptions are made, these assumptions must be clearly stated. In order to answer requirements of this assignment, you may need to access resources other than the set text. All sources used in your assignment must be clearly referenced, but there is no set referencing style for this course. 5