1. Calculate the projected return on the house for the next year and give your recommendation. 2....
Question:
1. Calculate the projected return on the house for the next year and give your recommendation.
2. Finish the nonfinancial investments section of this case, which includes the topics described in the previous chapter and this one.
Monica continued to worry about the couple's financial future. She began to question their investment in a home. She asked whether would be better to sell their home now and invest the proceeds. She estimated that the marketable securities would provide a return of 5 percent after taxes. She and Richard thought the current value of the house now would be $300,000 and would increase by 6 percent a year. A rental in a comparable apartment would cost $2,200 a month. Assume for purposes of this section only that Richard and Monica's marginal tax bracket is 30 percent and other statistics including:
Annual maintenance ....................................... $3,000
Property taxes ............................................... $5,000
Insurance .................................................... $1,500
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