FINC 485 Study Guide - Final Guide: Aan, The Monthly, Prepayment Of Loan
Document Summary
The decision to lease versus own: chapter 15 bf: own vs lease: equity freed by leasing = discounted value of the net cost of leasing there are two components: (1) the annual net cost differential and (2) Equity freed = original property value original mortgage balance. 2. btcf sale = gross sales price sales expenses mortgage balance. 3. adjusted basis = original basis accumulated depreciation. 4. taxable gain = gross sales price sales expenses adjusted basis. 5. taxes = taxable gain x marginal tax rate. 1: sale and lease back: only difference from a. above is that atcfsale now replaces equity freed by leasing , beyond the math, reasons why one company might own while another leases. Financing residential properties chapters 4, 5, and 6 bf: loan closing costs and the effective cost of borrowing. Ii: understand and be able to set up problem in which closing costs have an impact on the effective cost of the loan*
