Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Greg Allen, age 25, is considering buying his first house, but is uncertain if it is a better decision than renting an apartment. He could rent a 2,000 square foot, 3 bedroom apartment with a carport for $940 per month. Alternatively he could buy a home closer to his work for $175,000. The home is a 3 bedroom, 2-car garage property with similar square footage to the apartment. By paying $2,000 in closing costs, putting $22,000 down, and taking out a $153,000 mortgage, his payment would be $687 (principal and interest at 4.5% for 30 years) plus $200 per month real estate taxes, $100 per month home insurance, and $25 per month private mortgage insurance. He thinks he would stay in the home for 5 years. He expects his rent to increase and home to appreciate at 2% per year over the 5 years. Investments will return 7% before tax over that period. When he sells the home, he will pay a realtor 6% of the sale price and $2,000 in closing costs. Please prepare an analysis of whether he should rent or buy, considering his cash flow and tax consequences at a federal marginal rate of 25% and a state tax rate of 6% using an Excel spread sheet. Greg itemizes whether he buys the house or not. Assume he buys the home on January 1, 2013. Prepare spreadsheets and a less-than-200-word memo describeing your conclusion whether to buy or rent.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M945920

Have any Question? 


Related Questions in Accounting Basics

Review the provisions of the sarbanes-oxley act of 2002 to

Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you believe made the most significant imp ...

Cost accounting systemsconsider the places of employment of

Cost Accounting Systems Consider the places of employment of the team members or businesses with which the team is familiar and the industries in which they operate. Create a 12-slide presentation, including detailed spe ...

Discussion questions 1 and 2dq 1accounting cyclefinancial

Discussion Questions 1 and 2 DQ #1:Accounting Cycle Financial statements are a product of the accounting cycle. Think about two different companies: a manufacturing company, and a retail company. Why would different comp ...

If a nurse deposits 12000 today in a real estate investment

If a nurse deposits $12,000 today in a real estate investment trust (REIT) and the interest is compounded annually at 7% percent, what will be the value of this investment: a.) Five years from now? b.) Ten years from now ...

Please be sure to show all of your work and calculations1

Please be sure to show all of your work and calculations. 1. From the below information, calculate the final balance to be carried forward in your check stubs as of the end of October. Oct. 1 beginning balance $1,200.50 ...

Please answer the following question analysis needed with

Please answer the following question. Analysis needed with explanation. Use in-text citation and reference page if necessary in APA format. Answers should be must be plagiarism free. Zaldor Corporation sells a specialize ...

Although sloan company had good earnings reports in 20x5

Although Sloan Company had good earnings reports in 20X5 and 20X6, it had a negative retained earnings balance on December 31, 20X6. Jacobs Corporation purchased 100 percent of Sloan's common stock on January 1, 20X7. Re ...

Aountingfalcons incorporatedassetsnbsp20132012cash and

Accounting FALCONS INCORPORATED Assets   2013 2012 Cash and Marketable Securities 10 80 Mc.. Receivable 375 315 Inventories 615 415 Total Current Ass. 1,000 810 Net plant and equipment 1,000 870 TOTAL ASSETS 2,000 1,680 ...

Assignmentpigskin must decides how many footballs to

Assignment Pigskin must decides how many footballs to produce each month for 6-month planning horizon. Monthly demand must be satified on time. Set a model to determine the production plan for next 6 months which incurs ...

This assignment will assess the following learning

This assignment will assess the following learning outcomes: - Demonstrate the impact on the financial statements and the implication for different users of accounts of alternative ways of treating controversial accounti ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro