Chris and Grace Johnson Financial Case 1. Strengths: ■ They a positive cash flow; the total income is 122,782 per year, and the total outcome is 116,024. The net cash flow per year is 6,758. ■ Both Chris and Grace are economically productive. Both are professionals and invest in the education of their sons. That will guarantee a good economic performance in the present and future. ■ They are the owners of the business. Even though they are employees, the business gives them a positive increase of cash flow. Weakness: ■ They don't have enough assets that generates a positive cash flow except the restaurant. ■ The 401k and deposit certificate are not good investments because of the low return and the high taxes that apply to those investments …show more content…
Liquid Assets / Monthly Expenses = 19,200 / (116,024/12) = 1.98 Liquid Assets / Current Debt Payments = 19,200 / 5,200 = 3.69 Net Worth / Total Assets = 6,758 / 343,923 = 0.02 Total Debt / Total Assets = 118,036 / 343,923 = 0.34 Total Debt / Annual Total Income = 118,036 / 122,782 = 0.96 Housing and Monthly Debt Payments / Monthly Gross Income = 10,267 / (122,782/12) = 1.00 Housing costs / Monthly Gross income = 1,800 / (122,782/12) = 0.18 Monthly Savings / Monthly Gross Income = (5860/12) / (122,782/12) = 0.05 4. The liquidity ratios that relate current assets and liabilities and long-term assets and liabilities are important to evaluate the capacity of the family to avoid problems with the banks and creditors. The other important ratio is the relation between income and outcome. 5. The original mortgage of the house was signed by 103,190 considering thirty years of mortgage and 9.25% and applying the Net Present Value principle the year payment is: 10267. 6. They made the first payment. 7. Not yet, they are starting to pay the current …show more content…
With the current mortgage, they will pay at the end of the contract 308,026 and with a 15-year mortgage, they will pay 194,867.44. It is bad business for them when they plan to save 5,860 a year for retirement. The year payment for the 15-year mortgage is 12,991.16. 9. The other method to renegotiate the mortgage is with the interest rate. The interest rate could go down, at that moment, the family could go to the bank to renegotiate the mortgage. 10 Is the health care insurance coverage adequate? Yes, the payment is accessible for the family, and the deductible amount (2000) are under the annual savings of the family. The coverage of 100% of medical expenses over 2000 is a benefit for the family. 11. The interests of the residence payment are a tax shield for the income of the family. The value for the previous year is 9545.08. 12. Yes, she is a dependent for the Johnson Family, because her economic income depends on 100% of the Johnson family. 13. Yes, she is a dependent for the Johnson Family, because her economic income depends on 100% of the Johnson family. 14. They gave to Mrs. Johnson 6000 a year and to Mrs. Zhang 3600. Under the topic 602 of IRS, the limit for tax purposes is 6000 for two or more dependents (IRS).
According to the conditions above, what should their monthly payment be? If Kelsey and Cody do not send their payment in on time, what will the following month’s payment be?
| |finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per |
1. A condo in Orange Beach, Alabama, listed for $1.4 million with 20% down and financing at 5% for 30 years. What would the monthly payment be?
Determining the payment if we had a 15 year mortgage we would again use the formula monthly mortgage= amount financed x table value
Value tax shelter = VTS = rdTD/(rsU - g) = 0.09(0.40)($200,000)/(0.12 - 0.05) = $102,857
Most of this numbers came from exhibit 1 with exception of Rd, which was calculated by summing up the mortgage times its interest plus the bonds times its interests divided by D, Re which is found on the section of discount rate on the case study and taxes which Max Kovar said we could use 0.
Charitable contribution can only be claim with proof because the amount exceeds $250. The Blough should take action of going the the bank if it was paid by check or credit, however the Blough must not rule out contacting the organization the contributions were made to. If the Blough get proof, then they should claim the charitable contribution of $2,693.
You can't just divide your mortgage amount into fifteen years instead of thirty. In order to accurately figure out what type of payments you would need to make in order to pay off your mortgage in fifteen years you need to use a mortgage calculator. A mortgage calculator will allow you to take into account how the interest would change by paying off your loan at a faster rate. As you make additional payments, you will reduce the overall interest that you have to pay
human resources departments to help them out. It is very difficult for smaller business owners to
Each year we will be making a payment of $338,208,087, which we will be getting through investors as well as payments from the residents of Alameda. The majority of the payment is the interest that is owed after each year which is $275,893,581.
i. The present value of the future minimum lease payments is equal to $8,546. This amount was calculated by discounting each of the payments at the given rate of 12%.
First we need to get the present value of the annuity for the 1,500 semiannual PMTs at year 14
Assume that the annual payments in the sixth year is equal to the rental payment in the fifth year ( 112.9 and 86.0) and the remainder of the lump sum values (54.6 and 17.8) is due in the seventh year. With a discount rate of 5.4%, the present values of the rental payments for the years 2006 and 2007 are as follows:
She owes the family that much. You're probably right.