Answer:
the answer is (C) both of the choices would produce the same return
How does this amount compare with the traditional financial guideline found in Question #2?
Use the following amounts for Jamie Lee and Ross’ calculations:
• 10% down payment
• 28% for TIPI
• $500.00 per month for estimated combined property taxes and insurance
• 5% interest rate for 30 years
4. Jamie Lee and Ross found a brand new three-bedroom, 2 ½ bath home in a quiet neighborhood for sale. The listing price is $275,000. They would like to place a bid of $260,000 on the home. The seller’s counteroffer was $273,000. What should Jamie Lee and Ross do next to demonstrate to the owner that they are serious buyers?
5. Jamie Lee and Ross received a signed contract from the buyer accepting their $273,000 offer! The seller also agreed to pay two points toward Jamie Lee and Ross’ mortgage. Calculate the benefit of having points paid toward the mortgage if Jamie Lee and Ross are putting a $40,000 down payment on the home.
6.Calculate Jamie Lee and Ross’ mortgage payment, using the 5 percent rate for 30 years on the mortgage balance of $233,000.
Answer:
Explanation:
2. Down payment is $40,000 Two and half times means 5/2 i.e. 5/2*$40,000 = $100,000...
5. One mortgage point costs 1% of the mortgage loan amount.
If Jamie Lee and Ross are putting a $40,000 down payment on a home with an accepted purchase price of $273,000, then the mortgage loan will be for $233,000.
$273,000 - $40,000 = $233,000.
Two points paid toward the mortgage will be a cost of $4,660 to the seller.
$233,000 x 0.02 = $4,660.
Typically, purchasing points means that a sum of money has been paid to the lender at closing to reduce the financing cost of the loan. The benefit of purchasing points is that it will secure a lower interest rate for the home buyers. In this sense, points are not put towards the mortgage loan itself, but are used to decrease overall expense to the home buyer over the term of a mortgage. A lower interest rate over the term of a mortgage can account for tens of thousands of dollars of saved interest.
If in this case the seller is simply giving money to the home buyers to put against the mortgage, then $4,660 will reduce the total loan amount to $228,340.
Although this question is somewhat ambiguously worded, it is more likely that the points are being purchased to secure a lower interest rate. While this doesn't represent an immediate windfall to the home buyers and does not decrease the mortgage loan amount, it would provide the greatest overall advantage to the home buyers.
I can't do 3,4,6 I'm very sorry about this man. I did my best but they come out wrong and I don't want to misguide you or mislead you in any way....
Very sorry!
For the following:
2. For Jamie Lee and Ross's combined income. Using the traditional financial guideline, they can afford:
Two and a half times Jamie Lee and Ross's salary is $2.5 × $100,000 = $250,000.
Jamie Lee and Ross's down payment is $40,000.
So, the maximum amount they can afford to spend on a house is $250,000 + $40,000 = $290,000.
3. Using Your Personal Financial Plan Sheet 24, the affordable mortgage amount for Jamie Lee and Ross is:
Monthly debt-to-income ratio (DTI): 28%
Monthly mortgage payment: $1,800
Monthly property taxes and insurance: $500
Down payment: 10%
Loan amount: $233,000
The DTI is calculated by dividing the monthly mortgage payment, property taxes, and insurance by the monthly income. In this case, the DTI is 28%, which is the maximum DTI that most lenders will allow.
The monthly mortgage payment is calculated by multiplying the loan amount by the interest rate and the number of years. In this case, the monthly mortgage payment is $1,800.
The property taxes and insurance are estimated to be $500 per month.
The down payment is 10% of the purchase price, or $23,300.
The loan amount is the purchase price minus the down payment, or $275,000 - $23,300 = $233,000.
4. Jamie Lee and Ross should make a written offer to the seller, stating their willingness to pay $260,000 for the home. They should also include a deposit of $1,000 to show that they are serious buyers.
5. The benefit of having points paid toward the mortgage is that it will lower the interest rate on the loan. Two points on a $233,000 loan is equal to $4,660. This means that Jamie Lee and Ross's interest rate will be 0.25% lower, which will save them money on their monthly mortgage payments.
6. For Jamie Lee and Ross's monthly mortgage payment:
Principal: $233,000
Interest rate: 5%
Number of years: 30
Monthly payment: $1,378
The principal is the amount of money that Jamie Lee and Ross are borrowing from the lender. The interest rate is the percentage of the principal that the lender charges in interest each year. The number of years is the length of the loan. The monthly payment is the amount of money that Jamie Lee and Ross will pay to the lender each month.
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Answer and Explanation:
The preparation of the sales section of the income statement is presented below:
Income Statement
For the year ended
Sales
Sales revenue $903,400
Less:
Sales Discount $15,400
Sales return & allowances $22,000
Net Sales $866,000
hence the net sales is $866,000
The freight out would not be considered. Hence, ignored it
(B) lower than it was in short-run equilibrium but higher than it was originally (before aggregate demand increased).
(C) lower than it was originally (before aggregate demand increased).
(D) equal to what it was originally (before aggregate demand increased).
Answer:
The answer is (A) higher than it was in short-run equilibrium.
Explanation:
Answer: a. Capital expenditure
b. Revenue expenditure
c. Revenue expenditure
d. Capital expenditure
Explanation:
Capital expenditures are usually huge expenditure on fixed assets such as land or building and they re usually incurred to generate revenue for the business.
Revenue expenditures are usually for short term basis and are operating expenses, that us required to run the business daily.
Based on the above explanation, the answers to the following will be:
a. Paid $78,000 cash to replace a motor on equipment that extends its useful life by four years. - Capital expenditure
b. Paid $390 cash per truck for the cost of their annual tune-ups. - Revenue expenditure
c. Paid $312 for the monthly cost of replacement filters on an air-conditioning system. - Revenue expenditure.
d. Completed an addition to a building for $438,750 cash. - Capital expenditure
Check the attachment for the journal entry
The $78,000 equipment motor replacement and the $438,750 building addition are capital expenditures. The $390 truck tune-ups and the $312 for air-filter replacements are revenue expenditures. Relevant journal entries: 'Equipment' debited and 'cash' credited $78,000, then 'Building' debited and 'cash' credited $438,750.
The transactions can be classified as either a revenue expenditure or a capital expenditure. 1. Paying $78,000 cash to replace a motor on equipment that extends its useful life by four years and completing an addition to a building for $438,750 cash are considered capital expenditures because they are significant investments that will benefit the company for more than one accounting period. 2. Paying $390 cash per truck for the cost of their annual tune-ups and paying $312 for the monthly cost of replacement filters on an air-conditioning system are both classified as revenue expenditures because they only benefit the current accounting period. The journal entries to record transactions A and D would be: Equipment (Debit $78,000), Cash (Credit $78,000) and Building (Debit $438,750), Cash (Credit $438,750).
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Answer:
a. $3,000 Favorable
Explanation:
Variable cost variance is the difference between the budgeted variable cost and actual variable cost for a period.
Use following formula to claculate the variable cost variance
Variable cost variance = Budgeted Variable cost - Actual variable cost
Placing values in the formula
Variable cost variance = Budgeted Variable cost - Actual variable cost
Variable cost variance = $23,000 - $20,000
Variable cost variance = $3,000
As the actual cost is less than the budgeted cost, so the $3,000 is saved in respect of variable cost.
Answer:
The highest acceptable manufacturing cost for which Sid's would be willing to produce the cover is $19.60
Explanation:
The computation of the highest acceptable manufacturing cost is shown below:
We know that the market priced at $24.50 and the operating profit is 25% of the cost, we assume the cost is 100 and the selling price equals to
= Cost + operating profit
= 100 + 25% × cost price
= 125
The market price is given for selling price but we have to compute for the cost price
So, the calculation would be
= $24.50 × 100 ÷ 125
= $19.60
The maximum manufacturing cost per unit for Sid's Skins to achieve a 25% profit margin is $19.60.
The question is asking for the maximum manufacturing cost Sid's Skins would be willing to incur per unit produced in order to achieve a 25 percent operating profit. To solve this, the formula cost = price / (1 + profit margin) is used, where the price is $24.50 and the desired profit margin is 0.25 or 25%.
By substituting these values into the formula, the calculation is as follows: cost = 24.50 / (1 + 0.25) = 24.50 / 1.25 = $19.60.
So, the maximum manufacturing cost per unit that Sid's Skins would be willing to endure in order to achieve their desired profit margin of 25 percent is $19.60.
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