FNCE 627: Week 7 Case Study 1 Below, I am including a case study for you to complete covering a portion of the material we covered this semester

Subject:UnrecognizedPrice: Bought3

Share With

FNCE 627: Week 7 Case Study 1 Below, I am including a case study for you to complete covering a portion of the material we covered this semester. Evaluate the information and prepare a written financial plan of maximum 8 pages following the table of contents as outlined below. 1.0 Assumptions and Key Considerations 2.0 Recommendations 3.0 Financial Analysis 3.1 Net Worth 3.2 Cash Flow 3.3 Strategies 3.4 Insurance Coverage 3.5 Retirement 3.6 Education 3.7 Major Purchase 3.8 Emergency Fund 3.9 IPP 4.0 Estate Analysis and Discussion 5.0 Selling the Business 5.1 Tax Planning for Selling the Business CASE STUDY The Adventurous Montgomerys: A Legacy of Success and Exploration John Montgomery: DOB September 18, 1982 Isabella Montgomery: DOB April 30, 1979 John and Isabella Montgomery are an extraordinary power couple who have been together for over two decades, celebrating their 22nd wedding anniversary this year. Their relationship is not only strong and stable but has also been enriched by their shared passion for adventure and innovation. Together, they have nurtured and raised three exceptional children: 1. Ethan: DOB July 11, 2010 2. Amelia: DOB November 22, 2008 3. Sebastian: DOB March 4, 2006 Their journey to success started in July 2012 when John took a leap of faith and founded a technology-driven startup in the heart of Toronto's vibrant tech community. He was determined to collaborate with like-minded, socially conscious entrepreneurs to create a positive impact on the world. Today, their startup has grown into a global tech giant, generating astonishing revenues of $20 million last year alone. The couple's vision and dedication have made them trailblazers in their industry, with even brighter prospects for the future. Isabella plays a pivotal role in the company, devoting approximately 10 hours a week and earning an annual salary of $150,000. On the other hand, John, as the CEO, draws a considerable income of $200,000. To further benefit from their company's success, both John and Isabella receive dividends from the corporate account, which amounts to $40,000 each per year. Their financial advisor has been instrumental in helping them strategize for their financial future. The couple has maximized their contributions to their RRSPs, with Isabella's registered account now standing at an impressive $300,000, and John's at a substantial $400,000. Additionally, they maintain a joint Tax-Free Savings Account (TFSA), which currently holds assets worth $500,000, diversifying their tax-efficient investments across various industries. "Montgomery Enterprises Inc.," their corporate entity, boasts a significant cash reserve, holding $2,000,000 CAD and $800,000 CAD. As their company continues to thrive, their accountant advises them to retain the CAD funds in a High-Interest Savings Account (HISA) to maximize returns. Fueling their adventurous spirit, the Montgomerys invested in a breathtaking oceanfront property in Castelgar, British Columbia, currently valued at $700,000 CAD. Excitement builds as they envision building their dream home, designed to embrace the beauty of nature and create unforgettable family memories. With their business flourishing, John contemplates the possibility of selling the company. Recent valuations conducted by a respected business valuation specialist indicate that the enterprise, along with its invaluable intellectual property, could fetch an astounding sum ranging from $25 to $30 million CAD. However, the prospect of one of John's side projects obtaining a lucrative patent adds the potential of escalating the selling price to a jaw-dropping $40 million CAD. As they plan for a future beyond their successful business venture, the Montgomerys are determined to maintain their comfortable lifestyle while securing their financial well-being. They seek comprehensive advice from their financial advisor on various critical aspects, including: 1. Assessing the optimal timing and strategy for the potential sale of their thriving enterprise. 2. Structuring a robust insurance portfolio to safeguard their family's future and business interests. 3. Ensuring a solid educational foundation for their children's bright futures. 4. Implementing effective tax planning strategies to maximize returns from the business sale and make the most of their registered accounts. 5. Determining the ideal financial cushion required for them to enjoy financial independence while preserving their current lifestyle. 6. Crafting a well-balanced investment plan, leveraging their RRSPs and TFSAs, to capitalize on opportunities and build a lasting legacy. Furthermore, John has been informed by his wealthy uncle, a prominent entrepreneur in Canada, which he plans to pass down his historic estate and one of his successful Canadian businesses to the Montgomery family. This impending inheritance adds another dimension of complexity to their financial planning. The Montgomerys' financial advisor is thrilled to be part of their extraordinary journey, helping them navigate the dynamic world of finance, adventure, and prosperity. Together, they envision an awe-inspiring future, filled with success, exploration, and a lasting impact on their loved ones and the Canadian community. Note, turn in one PDF file only for this assignment – good luck!