Question: Please answer all the questions below, not just one all of them. Kindly show work, Thank you. Lucy bought a house that costs $100,000 She

Please answer all the questions below, not just one all of them. Kindly show work, Thank you.

 Please answer all the questions below, not just one all of

Lucy bought a house that costs $100,000 She financed it with an 80% LTV mortgage. The morgage is a 30 year ruly amortizing FRM with annual compounding and annual payments Lucy's annual cost of ownership net of tax savings is exactly equal to the annual rent she would have paid to live in the same house Lucy will sell the house 30 years after purchase Suppose the house price grows 45annuay (compounded annually buying costs are share of purchase price the house seating costs are 6% of the selling price of the house 2 (a) Whats the sale price of the house in 30 years? QUESTION 29 3 points Save Answe (Continued) 2 (b) Whars Lucy's house sale cash flow(ater expenses)? QUESTION 30 3 points Save Answer (Continued) 2 (O) What Luey initial cash down when she purchased the house negative number QUESTION 31 s points Save Answ (Continued) a (a) owners the NPV for Lucy's buy s lease decision if her annual discount rate 56? QUESTION 32 Spoints Save Answer (Continued) 2 (e) what is Lucys annual IRR from owning net of leasing

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!