Session 10 - Prudent Case Study

School: University of Washington - Course: QMETH 501 - Subject: Accounting

QMETH 501: Decision Support ModelsSESSION 10: PRUDENT CASE STUDY

The Process of Modeling 2

Prudent Financial Services 3 Visualize Where You Want to Finish What numbers are needed by PFS management? What are the decisions that need to be made? What should the objective be? 4

Calculate By Hand (Example) What is the total initial investment? What income would be received for bonds 1 and 2 on January 1 of 2015 and 2016? Bond 1 2015: 2016: Bond 2 2015: 2016: 5

Calculate By Hand (Example) What is the resulting ending balance in the money market fund for the year 2014, 2015, and 2016 after receiving these payments, making pension payments for the year, and depositing any excess into the money market fund? 2014: 2015: 2016: 6

Sketch a Spreadsheet Model 7YearBond 1Bond 2Bond 3Bond 4 2014 2015$1040$200$30 2016$200$30 2017$10200$30 20180$30 2019$1000$30 2020$30 2021$30 2022$1030