FaFi | Family Finance| © Family Finance

FaFi | Family Finance| © 2 Family Finance www: Mobile: meetings + 1 exam (test) Next meeting: 11 th March. Douglas A., E. Lewin, Family Finance, Dearborn Trade Millar R., A Complete Guide to Family Finance, Kogan Page Publishers Israelsen C. L., R. O. Weagley, Personal & Family Finance Workbook, Kendall Hunt Pub 2006.

FaFi | Family Finance| © The aim of family financial management? Maximization of family wealth: First: how we calculate realization of the general aim in nonfamily financial management? 3

FaFi | Family Finance| © 10 steps to Value 1) CR 2) Operating Cycle 3) Assets 4) AP 5) Capital invested 4 6) Capital structure 7) FCF forecasting 8) IRR 9) Cost of Capital (CC) 10) ∆ V

FaFi | Family Finance| © Family Finance cases: Create himself or buy? (home products, home food or in restaurants, who should repair a tap, husband or plumber (tap expert), hire a maid? etc. Child in home or in kindergarden? (Homeschooling) Child in home or in school? Car: buy older but without the credit or a new but with credit? How many cars in a family? House or a flat? Why? A garden or a free time with fruits from a hipermarket? What kind of car? Which one? 5

FaFi | Family Finance| © Create himself or buy? Two + four family (2p + 4 ch). One warm dish for one person costs 5 euros in town. It take 1 hour to wait in queue and finaly after eating coming home. Eating takes 0.5 hour. For parents use work equivalent. Preparation of 6 dishes takes 2 hour daily and A euro / person for raw materials and energy for preparation of meal for whole family. 1hour of work of homekeeper: 3.5 euros per 1 hour. Its the work equivalent. For home food preparation we need additional equipment: cooker, dishwasher, greater fridge. It costs 400 euros initial investment and its economical lifetime is: 7 years. NWC = n * 5% of CE in case of home food. Cost od debt = k d = 18%; cost of equity = k e = 4.6% * (1-T b ) (remember about BELKA TAX! T b = Belka Tax Rate ) 6

FaFi | Family Finance| © Create himself or buy? Two adults family (2a). One warm dish for one person costs 5 euros in town. It take 1 hour to wait in queue and finaly after eating coming home. Eating takes 0.5 hour. For parents use work equivalent. Preparation of 6 dishes takes 2 hour daily and A euro / person for raw materials and energy for preparation of meal for whole family. 1hour of work of homekeeper: 3.5 euros per 1 hour. Its the work equivalent. For home food preparation we need additional equipment: cooker, dishwasher, greater fridge. It costs 400 euros initial investment and its economical lifetime is: 7 years. NWC = n * 5% of CE in case of home food. Cost od debt = k d = 18%; cost of equity = k e = 4.6% * (1-T b ) (remember about BELKA TAX! T b = Belka Tax Rate ) 7

FaFi | Family Finance| © Create himself or buy? Two + one + seven family (2p + 1g + 7 ch). One warm dish for one person costs 5 euros in town. It take 1 hour to wait in queue and finaly after eating coming home. Eating takes 0.5 hour. For parents use work equivalent. Preparation of 6 dishes takes 2 hour daily and A euro / person for raw materials and energy for preparation of meal for whole family. 1hour of work of homekeeper: 3.5 euros per 1 hour. Its the work equivalent. For home food preparation we need additional equipment: cooker, dishwasher, greater fridge. It costs 400 euros initial investment and its economical lifetime is: 7 years. NWC = n * 5% of CE in case of home food. Cost od debt = k d = 18%; cost of equity = k e = 4.6% * (1-T b ) (remember about BELKA TAX! T b = Belka Tax Rate ) 8

FaFi | Family Finance| ©