Please I need help with the following.
Assign suitable variable and derive appropriate equations/inequalities to describe your finiancial plan and justify them. Please include relevant figures like graph, diagram and charts to support your arguments. Hence, briefly explain the graph or figures.
Please consider following factors:
- financial security
-job satisfaction
-family life
-safety
-health
SCENARIO After months of being at loss, the franchise Alvin is working for as a manager has decided to cut down its operating expenses by reducing the labor cost. The management has decided to impose 30% pay cut on all employees to sustain the business. Alternatively, a few senior employees of the company, including Alvin, may opt for voluntary separation scheme (VSS). The compensation offered is RM 100,000 A voluntary separation scheme (VSS) is a scheme/offer where an employer invites and offers the employee to resign voluntarily without the implications of a retrenchment while still receiving fair compensation from it. Alvin is very disturbed with this sudden turn of events as the recent unstable economy has reduced other job opportunities tremendously leaving him without the option to change jobs anytime soon. That leaves him with only two choices: Option 1 accept the pay cut and adjust his budget with the new pay rate Option 2 :opt for VSS and come up with a new income source soon If Alvin accepts the pay cut, he has to come up with a new viable budget for his household. With his current income of RM 10,000 monthly, he had no problem maintaining his small family of five (parents, wife and an 8-year-old son). However, the new pay rate may not make the cut for their current lifestyle. He does not mind shot-term sacrifices like reducing non-essential expenses. At the same time, he cannot compromise on their quality of life (Qol) in order to save money. If Alvin opts for VSS, he can temporarily sustain the family expenses with compensation received but it can only be a temporary fix. He needs to find a new source of income real soon or he will soon be depleting his savings to cover their expenses. With the given information, help Alvin make an informed decision by comparing the expected outcome of each option in three years. Use the information in TABLE 1 to aid your decision-making process. Alvin's current monthly household budget is as shown in APPENDIX 1 TABLE 1: Factors Affecting Each Option OPTION1 OPTION 2 What is the new pay rate? How should the compensation be Based on the current household budget, allocated? how much is spent for essentials and Is it possible to generate additional non-essentials? income from the compensation How can the current budget be altered received? to cater for the new pay rate? What other possible sources of income What are the possible lifestyle is available? modification needed to implement these. Does the current budget require alterations? modification? Overall, is this sustainable in the long Can their current lifestyle be run? maintained? Assign suitable variable and derive appropriate equations/inequalities to describe your financial plan and justify them accordingly. You may include relevant figures (e.g.: table, charts, diagrams etc.) to support your arguments. Hence, briefly explain your graph or figures. You may consider the following factors to assess their Qol: financial security job satisfaction family life health safety You may refer to APPENDIX 2 for recommended budget percentage as a general guideline APPENDIX 1 INCOME Salary Cash dividend from investment TOTAL AMOUNT (MYR) 10,000.00 750.00 10, 750.00 AMOUNT (MYR) 1,500.00 200.00 1,000.00 500.00 HOME EXPENSES Groceries Personal Supplies Utility (electricity, water, fuel, cable) Phone, Internet Childcare Maintenance Medical Expenses Entertainment (Eating out, movies etc.) Miscellaneous TOTAL 300.00 100.00 500.00 300.00 100.00 4,500.00 OBLIGATIONS House Loan Car Loan AMOUNT (MYR) 2,200.00 1,050.00 1,500.00 4,750.00 Insurance & Medical Cards TOTAL SAVINGS Emergency Fund Education Fund AMOUNT (MYR) 1,000.00 500.00 1,500.00 TOTAL APPENDIX 2 % of Take-Home Pay Category Giving Medical 10 - 15% 5 - 10% 25 - 35% Housing Transportation 10 - 15% Savings 10 - 15% Food 10 -15% 5 - 10% Utilities Insurance Recreation 10 - 20% - 5 - 10% Clothing 2-5% Personal 5 - 10%
