FaFi | Family Finance| © Family Finance

FaFi | Family Finance| © 2 Family Finance www: Mobile: meetings + 1 exam (test) Next meeting: 25 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| © Car: how many cars in family? 0 or 1? You have 2+3 family (2 adults + 3 nondriving children) and you are living in a city like Wroclaw. You can choose between taxi or driving by car (no mass public transport). If you will have a car, you have to change car in every 6 years. In every year, car or taxi is used for 5oookm distance (one adult has 5km to work, every child has 2km to school (in various destinations) and in mornings children are delivered to schools by car or taxi. 1km by Taxi costs 0,5€. New car (12ooo€) or used one (3ooo€). Insurance: 3.5% for a new or 8% for an old. Your car value is in every year smaler, and go down 18%. Services (264 euros) for every 30oookm with the new or (428 euros) for every year or 5ooo. Repair one time in every year (100 euros) for a new one, and (340 euros) for every 15ooo km for an old one. Cost of emergency transport is 0 for new and 200 euros for every 40ooo for old one. Old car uses 9 liters of gasoline per every 100km a new one, only 8 liters. Gasoline costs 1,1 euro per 1 liter. After 6 years, you sell car for average value (18% less than your startup investment). 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). One time in year, you will go on holidays 500 km in one destination. Own car parking costs 130€ monthly. What do you think? What is better, to have own car or travel always by taxi? 3

FaFi | Family Finance| ©