Chapter Six: Time Value of Money problem Phil turned 25 years old on December 18, 2018 and works as an assistant for a CFO. Phil's salary for 2019 is $51,000 and is expected to increase 3.5 percent per year until he retires in 40 years. Phil's salary is paid at the end of every year. Average tax rate is 20%. On December 27, 2018, the CFO wants Phil to get a CFP certificate, which will allow Phil to be promoted. Upon promotion the new salary will be $66,000 and increase 4.1% annually until retiring at 65. This salary will be paid at the end of each year. Phil also gets a one-time bonus of $5,100 payable Jan 1st, 2020. Phil's average tax rate will increase to 25 percent with the higher salary. Phil is responsible for expenses related with the certificate. There is also the option to enroll in a one-year, full time (no work while in class) certificate program. Class would start Jan 18th, 2019. Tuition costs $7,100, and all other expenses are $1015. All expenses are due Jan 6th, 2019. Phil takes a few days off to decide on what to do. Phil has enough savings to pay for the certificate but wants to run numbers before enrolling for the CFP. For time value money calculations Phil is using a 5 percent discount rate. What will Phil's decision be? Provide all calculations (with time value of money functions/and other formulas) in excel used to reach this decision. What minimum starting salary for Phil's promotion should the CFO offer to make Phil get the CFP certificate? Provide all calculations (with time value of money functions/ and other formulas) in excel used to reach this decision. Chapter Six: Time Value of Money problem Phil turned 25 years old on December 18, 2018 and works as an assistant for a CFO. Phil's salary for 2019 is $51,000 and is expected to increase 3.5 percent per year until he retires in 40 years. Phil's salary is paid at the end of every year. Average tax rate is 20%. On December 27, 2018, the CFO wants Phil to get a CFP certificate, which will allow Phil to be promoted. Upon promotion the new salary will be $66,000 and increase 4.1% annually until retiring at 65. This salary will be paid at the end of each year. Phil also gets a one-time bonus of $5,100 payable Jan 1st, 2020. Phil's average tax rate will increase to 25 percent with the higher salary. Phil is responsible for expenses related with the certificate. There is also the option to enroll in a one-year, full time (no work while in class) certificate program. Class would start Jan 18th, 2019. Tuition costs $7,100, and all other expenses are $1015. All expenses are due Jan 6th, 2019. Phil takes a few days off to decide on what to do. Phil has enough savings to pay for the certificate but wants to run numbers before enrolling for the CFP. For time value money calculations Phil is using a 5 percent discount rate. What will Phil's decision be? Provide all calculations (with time value of money functions/and other formulas) in excel used to reach this decision. What minimum starting salary for Phil's promotion should the CFO offer to make Phil get the CFP certificate? Provide all calculations (with time value of money functions/ and other formulas) in excel used to reach this decision
