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Established in 1977, Krona Community Hospital is a 60-bed, acute care hospital located in the heart of Banconota County. With a staff of nearly 100 physicians and specialists, 400 employees and 75 volunteers, they offer a full range of health care services. They are accredited by The Joint Commission.

Nouveau Health, a private, not-for-profit health care chain, took over management Krona Hospital. Last year, state officials began to discuss Nouveau’s proposal to build a new, replacement hospital in Banconota County. The new facility would have 74 acute care beds, four observation rooms, four surgical operating rooms, one C-section room, a 24-hour emergency department, a maternity center, an intensive care unit, and an extensive outpatient center that will provide service such as diabetes treatment, physical therapy, speech pathology, and so forth.

You are a staff member in the finance department at Nouveau Health, whose sole responsibility is to advance the success of the organization through assisting in planning, forecasting, and finance management.

Primary Task Response: A wellness program includes services with exercise programs and chronic disease management to catch problems early so that a customer can be seen in urgent care or a doctor’s office instead of ending up in the hospital. It increases outpatient revenue and decreases inpatient admissions and readmissions thereby, hopefully, decreasing risk for financial loss. Familiarize yourself with an example of a wellness center at the following Web site:

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July 1, 2023

Case Study 1

Your clients, Jerry and Jenny, are 25 years old. They have come to you for assistance with planning for the cost their child’s education and their retirement. They would like to know if they are on track to reach these two goals. Below are the facts about the family.

· Jenny currently earns $150,000 and they expect to need $150,000 per year in today’s dollars in retirement. Jerry is a stay-at-home dad.

· Jenny plans to retire at age 67, and they expect to live until age 100.

· They also expect that Social Security will provide $40,000 of benefits in today’s dollars at age 67.

· Jenny has been saving $5,000 annually in her 401(k) plan.

· Their son, Jazz, was just born and is expected to go to college in 18 years.

· They want to save for Jazz’s college education, which they expect will cost $20,000 in today’s dollars per year and they are willing to fund 5 years of college.They want all funds needed for Jazz’s college education available the first year Jazz starts college.

· They were told that college costs are increasing at 7% per year, while general inflation is 3%.

· They currently have $100,000 saved in total and they are averaging a 10% rate of return and expect to continue to earn the same return over time.

1. Calculate the current cost of Jazz’s college education.

2. Calculate the capital needs of the couple at retirement and the current value (today’s value) of their retirement needs.

3. Provide the couple with a summary of their goals with the current total amount needed to reach their goals, showing how you arrived at the total.

4. Given their current resources, does the couple have sufficient resources to achieve their goals? Using calculations, show and explain your answer to the couple.

5. Using calculations and explanations provide the couple with three alternatives for meeting their goals.

6. In your own words, provide the couple with the advantages and disadvantages of two accounts and/or investment instruments that are used specifically to save for college education expenses. Which would you recommend and why?

Your completed Case Study must contain a minimum of 500 words and 2 citations in current APA format. Acceptable sources are personal finance journals, magazines, or newspapers.

Case Study 2

Your client, Steven, age 43, has come to you for assistance with retirement planning. He provides you with the following facts.

· He earns $80,000 annually.

· His wage replacement ratio has been determined to be 80%.

· He expects inflation will average 3% for his entire life expectancy.

· He expects to work until 68, and live until 90.

· He currently has $60,000 saved, and he is averaging a 9% rate of return and expects to continue to earn the same return over time.

· He has been saving $3,000 annually in his 401(k) plan.

· Additionally, Social Security Administration has notified him that his annual retirement benefit, in today’s dollars will be $26,000.

1. Using calculations, explain to Steven why it is realistic to use a wage replacement ratio of 80%.

2. Using the annuity method, calculate how much capital Steven will need to be able to retire at age 68.

3. Given his current resources, does he have sufficient resources to achieve his retirement goal? Using calculations, show and explain your answer to Steven.

4. Provide Steven with 3 alternatives for meeting his retirement goal. In doing so, use calculations to show the impact of each alternative.

Before hiring you as his financial planner, Steven was going to another planner. He mentions that the other planner calculated this retirement needs another way, so he asks you to calculate his retirement needs using other methods.

5. Using the capital preservation method, calculate how much capital Steven needs in order to retire at 68.

6. Using the purchasing power preservation method, calculate how much capital Steven needs in order to retire at 68.

7. In your own words, provide Steven with the advantages and disadvantages of each method and explain why the amounts calculated are different with the three methods.

8. In your own words, provide Steven with the advantages and disadvantages of 2 investment instruments that are used specifically to save for retirement. Which would you recommend and why?

Your completed Case Study must contain a minimum of 700 words and 2 citations in current APA format. Acceptable sources are personal finance journals, magazines, or newspapers.