1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sashaice [31]
3 years ago
10

Julie Brown is a single woman in her late 20s. She is renting an apartment in the fashionable part of town for $1,000 a month. A

fter much thought, she's seriously considering buying a condominium for $175,000. She intends to put 20 percent down and expects that closing costs will amount to another $5,000; a commercial bank has agreed to lend her money at the fixed rate of 6 percent on a 15-year mortgage. Julie would have to pay an annual condominium owner's insurance premium of $560 and property taxes of $1,000 a year (she's now paying renter's insurance of $550 per year). In addition, she estimates that annual maintenance expenses will be about 0.5 percent of the price of the condo (which includes a $30 monthly fee to the property owners' association). Julie's income puts her in the 25 percent tax bracket (she itemizes her deductions on her tax returns), and she earns an after-tax rate of return on her investments of around 4 percent.
Required:
a. Evaluate and compare Julie’s alternatives of remaining in the apartment or purchasing the condo.
b. Working with a friend who is a realtor, Julie has learned that condos like the one that she’s thinking of buying are appreciating in value at the rate of 3.5 percent a year and are expected to continue doing so. Would such information affect the rent-or-buy decision made in a?
c. Discuss any other factors that should be considered when making a rent-or-buy decision.
d. Which alternative would you recommend for Julie in light of your analysis?
Business
1 answer:
Yakvenalex [24]3 years ago
5 0

Answer:

a. Julie should continue live in her own apartment.

b. She should then purchase the condo

c. Home maintenance cost and tax benefit.

d. She should live in her own apartment and rent the condo after purchase.

Explanation:

Buying cost of condo $175,000

Loan interest amount  $8,400 [ $175,000 * 80% * 6%]

Insurance premium $10  [560 - 550]

Property taxes $1,000

Maintenance expense $875  [$175,000 * 0.5%]

Total additional cost per year $10,280

If Julie plans to buy the condo she will have to incur additional cost of $10,280 per annum.

b. If the price of condo increases by 3.5% per year then she should consider buying the condo.

You might be interested in
What is a major advantage of a business that is a partnership rather than a sole proprietorship? the business is easy to start u
timurjin [86]
The correct answer to this question is "the responsibility for the business is shared." A major advantage of a business that is a partnership rather than a sole proprietorship is that the responsibility for <span>the business is shared. </span>

The correct answer to this question is "<span>conglomerate </span>." the term for the joining of two or more firms involved in different stages of producing the same good or service is <span>conglomerate </span>
7 0
3 years ago
Marlon's credit report indicates non-payment of a credit card bill. which act passed by congress can help him correct this error
vichka [17]
Your answer would be Fair Credit Billing Act
6 0
3 years ago
Write the function of commercial bank in points.(don't copy)​
solmaris [256]

Explanation:

Functions of Commercial Bank:

1=Acceptance of deposits from public.

*Demand deposits.

*Fixed deposits.

*Saving deposits.

2=Advancing of loans.

*Direct loans.

*Money at call.

*Overdraft.

*Discounting bills of exchange.

if you want to know more u can ask me.

8 0
2 years ago
Redemption of Bonds Payable An $800,000 bond issue on which there is an unamortized premium of $57,000 is redeemed for $785,000.
katrin2010 [14]

Answer:

Dr Bonds payable 800,000

Dr premium on bonds payable 57,000

    Cr Cash 785,000

    Cr Gain on redemption of bonds 72,000

Explanation:

the bonds' carrying value = face value + unamortized premium = $800,000 + $57,000 = $857,000

the gain or loss resulting form the redemption of the bonds = carrying value - redemption cost = $857,000 - $785,000 = $72,000

7 0
2 years ago
Flying High Manufacturing produces frisbees using a three-step sequential process that includes molding, coloring and finishing.
Talja [164]

Answer:

Option D : Debit to WIP Inventory - Coloring and Credit to WIP Inventory - Finishing

Explanation:

Definition of Finish Goods Inventory:

Finish Goods means having a product that is ready for the dispatch(consumer) after the completion of all processes of manufacturing. i.e. Molding, Coloring, Finishing for the process in hand.

Therefore Finish Goods Inventory will be the products which we receive after the completion of Finishing process not after the coloring process.

Considering the above statement, Option A & Option B get omitted from the possible correct options.

Thus we are left with only Option C & Option D:

As we know that:

Credit is something due towards a process(person) and increase the liability of respective process or person.

Debit is something given by a process (person) and decreases the liability of respective process or person.

On seeing the definitions of credit & debit, if frishbees are being transferred from coloring to finishing process, then it should be debited from the coloring process's account as it has handed over the product while decreasing it's liability and,

It should be credited to the finishing process's account as it has received the product to work on while increasing it's liability.

Taking the above explanation into consideration:

Option D is our only true choice.

6 0
3 years ago
Other questions:
  • Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement
    8·1 answer
  • An authentication token is a(n):____________
    8·1 answer
  • Chief financial officer Barry submits travel and expense reports that are completely genuine and encourages employees in his div
    11·1 answer
  • What are the period and vertical shift of the cosecant function below? period: ; vertical shift: 1 unit up period: ; vertical sh
    15·2 answers
  • Which of the following people would tend to favor a communist economy?
    12·1 answer
  • Bill is a construction worker who was laid off because the market for new homes has been adversely affected in the recession. bi
    6·1 answer
  • A grievance isGroup of answer choicesan implication that management has broken a management-union agreement, but it must be prov
    9·1 answer
  • Type your summary here. Use the Internet to find an article that presents a forecast of the economy's performance in the next th
    7·1 answer
  • The main risk in a strategic alliance is that? a. critical employees will be hired away by the strategic partne
    7·1 answer
  • Understanding how income is distributed within and across populations informs firms of different groups':_____.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!