Income for year ended 30^th June 2018:

Income type

Amount

Gross Salary- Janet

$70,000

Gross Salary- Steven

$54,000

Vanguard Bond Fund- Distribution 3.85% (Janet)

$770

NAB Savings Account Janet- Interest 2.3%- Janet

$230

Macquarie Group Limited- Dividend $2.05 per share- Steven

$410

(partial franking credit $80)

Estimated annual expenses

Item

Amount

Rent (650 per week)..........................................

33,800

Electricity/Water/Gas ........................................

3,000

Telephone/Mobile ............................................

2,200

Pay television/Internet .......................................

1,100

Insurance -contents ..................................

1,200

Insurance - car...............................................

3,000

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 ...........................................

6,000

Car registration ................................................

800

Public transport ...............................................

2,800

Other expenses

Food ............................................................

12,500

Clothing/Haircuts/Beauty ...................................

5,500

Medical/Dental ................................................

2,500

Entertainment/Dinners .......................................

6,000

Teacher Union Membership (Janet)..................................

1,000

Gifts - Birthdays/Christmas .................................

3,000

Total ...........................................................

98,400

Current Assets and Liabilities

Assets (Ownership)

Current valuation

$

Liability (Ownership)

Current valuation $

Home Contents (Joint)

20,000

Credit cards (Joint)

Includes the annualinterest cost

6,000

Car (Joint)

35,000

Car loan (Joint)

5 year term at 12%

30,000

Bank Account:

Cheque Account (Joint)

8,000

Investments:

NAB savings Account (Janet)

Vanguard Bond Fund (Janet)

Macquarie Group Ltd Shares (Steven)

20,000

20,000

20,000

Questions

A.Calculate Janet's and Steven's after-tax income and savings ratio for the year ended June 2018. Explain one way in which Steven and Janet could reduce their tax liability and show the effect this strategy would have.

B.Review the Blake's investment portfolio and explain whether they are diversified adequately. Consider both investments across different asset classes and investments within classes. Make two recommendations on how they should change their portfolio for future investments and justify these recommendations.

C.Calculate the future value of the investment portfolio 10 years from now assuming it will earn a 5% p.a. after tax. In this calculation you should include the FV of the current investments and the FV of the contributions that Blake's estimate that they make over the next 10 years.Assume that contributions are made at the end of the year and that the first contribution will be made 365 days from now.Finally, explain one strategy that Janet and Steven could reach their goal more quickly and show the influence that this will have.

Please help with A B and C