You are living on your own, sharing rent with a roommate, trying to save up for college, and working for minimum wage ($7.25) at a fast-food restaurant. You work 40 hours per week and take a bus to and
from work five days a week. Along with saving for tuition, you are also trying to save enough to have 4
months’ rent in your account, a new car so you don't have to take the bus, and a vacation to Cancún
with some of your friends.
Monthly Budget
Item Cost Monthly Total
Rent $260

Utilities (cable, Internet, Cable and Internet: $30, water: $20, electricity: $40
water, and electricity)

Groceries $50 per week

Entertainment $20 per week

Public transportation $1.50 per bus ride

Clothing $50

Cell phone $45

Step 1: a. Approximately how much is your gross salary per month?

b. Because you would be in the lowest tax bracket, you would be taxed at approximately
15 percent. How much would you actually take home every two-week pay period? How much
would you take home each month?

Step 2: a. How much are your total monthly expenses?

b. What other costs may you incur that are not included in your monthly budget?

c. How much disposable income do you have each month?

Step 3: How long would it take you to save 4 months’ rent?

Step 4: You found an old, used car that you want to buy so you can stop taking the bus. It costs
$2,000. How long would it take you to save up for the car?

Step 5: a. Flights to Cancún are $380 round trip. The hotel where your friends are staying will cost
$75 a night and you will be staying 3 nights. What would the total cost of your trip be?
Be realistic.

b. How long would it take to save up for the vacation?

Step 6: What would you save for first?

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600