Use the Table Below to Answer the Following Question(s) -What Will Be Sheila's Salary in Her Second Year of Joined

question 50

Multiple Choice

Use the table below to answer the following question(s) .
Sheila joined Simsin Tradings at the age of 36 with a starting salary of $75,000. She expects a salary increase of 5 percent every year. Her retirement plan requires her to pay 9 percent of her salary, while the company matches it at 32 percent. She expects an annual return of 7 percent on her retirement portfolio. Using a predictive model for Sheila's first five years, calculate the following, assuming that the salary increases at the same rate every year, and the return of interest does not change. $\begin{array}{|l|l|}\hline \text { Retirement Plan Model for Sheila } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Retirement Contribution (percent of salary) } & 9 \text { percent } \\\hline \text { Employer Match } & 32 \text { percent } \\\hline \text { Annual Salary Increase } & 5 \text { percent } \\\hline \text { Annual Return on Investment } & 7 \text { percent } \\\hline\end{array}$
-What will be Sheila's salary in her second year of work at Simsin?

• A) $81,750
• B) $82,688
• C) $78,750
• D) $ 75,000

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Definitions:

Management's Expectations

The forecasts or outlooks on future business performance, operational results, or financial conditions as projected by a company's management.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the goal of maximization of shareholder wealth.

Capital Markets

Financial markets for buying and selling equity and debt instruments, which channel savings and investment between suppliers of capital and users of capital.

Large Sums

Large sums typically refer to a significantly high amount of money in various financial contexts, including investments, transactions, or savings.