Personal use assets, Operation Management

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Rose  considers herself  a relatively conservative investor  and  the  score  from her investor profile questionnaire categorizes her as an "income and moderate growth" investor. She has been with the City for 18 years and has been a member of OMERS for the entire time.

Her pension adjustment from OMERS means she does not contribute a great deal to her RRSP each year. And she took some time off when the children were born. However, she has been able to contribute the maximum possible each February and currently has $23,000
in her RRSP invested in a Canadian dividend fund earning 5% a year.

Hint: When calculating Rose's PA, see Example 6 in Chapter 5 for guidance (the CPP Offset is not calculated exactly the same) but be sure to use the OMERS benefits shown in Focus Box 4-2 in Chapter 4. Use a 5-year average YMPE of $42,700.

Their principal residence is valued at $325,000 and  the house  is held in  joint tenancy by Leonard and Rose. Household contents are valued at $75,000 while their clothes are estimated to be worth $35,000. Rose has a 4-year-old automobile, which is worth approximately $9,000. On May 31, 2006, Leonard signed a 5-year lease on his car. The car cost $36,000 and he made a 20% down payment toward the lease and his monthly lease payments are made at  the beginning of  the month beginning June 1, 2006. He  is paying interest of 4.8% on  the lease and plans to buy the car for  the 20% buyout when the lease expires. The car has a current market value of $28,000.


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