In 2015 the Smiths purchased a home for $250,000 with a loan of $200,000 at 4% for 30 years. In 2025 the Jones purchased the home for $350,000 but were able to assume the Smith's existing mortgage (the Jones' just took over the remainder of the existing loan).

The Jones' can will also obtain a new loan at 30 years, 9.5% fixed with a limit of an 80% total loan to value (of all debt combined).

If the Jones' can not assume the old loan, they will obtain a new loan at 80% LTV, 30 years, 9.5%.

What is the balance of the loan the Jones' will assume in 2025?

If the Jones' are able/willing to assume the old loan, what is the addition loan amount the Jones' will need to borrow in 2025?

If the Jones' assume the old loan what will be the total monthly payment for the Jones' on their new house?

If the Jones' were to assume this mortgage and hold this home for 30 years, what would be their monthly loan payment per month in year 22 of their ownership?

If the Jones' could not assume the prior mortgage, what would they pay as their monthly payment?

If the Smith's could increase the home price to make the Jones' indifferent (meaning the Jones' monthly payment would be exactly the same in either scenario) to assuming the loan with an increased purchase price or paying a lower price at the prevailing rate and terms, what would that higher purchase price be?

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600