Suppose That You Are Interested in Buying a Home,but Are

question 112

Multiple Choice

Suppose that you are interested in buying a home,but are unsure of how much you can afford.What is the best way to determine your prospects for obtaining a mortgage?

• A)Calculate your debt limit ratio.
• B)Figure the 28/36 rule.
• C)Determine what your mortgage payment will be.
• D)Determine what your income taxes will be.
• E)Both B and C are correct answers.

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Definitions:

Machinery and Equipment

Fixed assets used in the operations of a business that are expected to be used for multiple years.

Ordinary Maintenance

Routine maintenance and repairs necessary to keep property (equipment, buildings, etc.) in efficient operating condition.

Asset Improvements

Expenditures made to increase the utility or extend the useful life of an asset.

Extraordinary Repairs

Repairs that are infrequent, large in scope, and extend the useful life of an asset beyond its original estimate.