Data Analytics For Accounting
Data Analytics For Accounting
19th Edition
ISBN: 9781260375190
Author: RICHARDSON, Vernon J., Teeter, Ryan, Terrell, Katie
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 3P
To determine

Do an Excel PivotTable according to state and check the number of rejected applications for State A. Identify relative proportion among number of rejected loans and population of State A as compared to the overall population of U.S.

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This is a Debt Coverage Ratio or DCR question for part a and a CAP rate question for part b]. Wendy is going to purchase a commercial building and is working with a commercial lender at her local bank. The bank has some loan parameters that Wendy must follow. Understanding the rules will allow her to calculate her cash, income, and payment projections. The bank requires a 1.4 debt coverage ratio for her project. Wendy needs to calculate her net operating income or NOI first. The debt coverage ratio is based on this number. Then she will apply for a 20 year loan at 5% with annual payments. Information on the property includes: Gross rents- $780,000 Vacancy 5% Salaries $85,000 Other Fixed Expenses $125,000 Variable Expenses 20% of gross rents.   NOI=_________________ Use the NOI and Debt Coverage requirement to calculate the answer.   What is the largest annual payment the bank will allow? If Wendy had to buy the property at a 6% CAP (capitalization) rate, what is the asking price?
Answer your friend who has following statements and questions: (1) Household debt and house prices do not cause systemic risk in a developed country like Norway (Table 1). (2) House prices grow equally across different Norwegian cities (Table 2). Table 1: Table 2: Mortgages/Total Regional House Prices (2003=100) Household Debt House Ratio (% Prices/Disposable Loans (%) Disposable | Income Income) Debt Per Сapita (Ages 15- 74) Oslo Kristiansand | Stavanger 2000 130 130 140 2009 180 42 150 175 200 200 230 200 300 2012 160 43 195 250 2018 47 220 260 (3) House price growth is being totally determined by the cultural homeownership of Norwegians rather than the Norwegian tax system. (4) Household debt does not theoretically cause a problem in Norway since many households have also assets to pay off the debts.
Consider the 2013 rejected loan data from LendingClub titled "DAA Chapter 1-2 Data." Similar to the analysis done in the chapter, let's scrub the employment length. Because our analysis requires risk scores, debt-to-income data, and employment length, we need to make sure each of them has valid data. a.Sort the file based on employment length and remove those observations (the complete row or record) that have a missing score ("NA"). Note that we are including the employment lengths of zero, different than the analysis in the chapter text. b. Sort the file based on debt-to-income and remove those observations (the complete row or record) that have a missing score, a score of zero, or a negative score, similar to that done in Problem 10. c. Sort the file based on risk score and remove those observations (the complete row or record) that have a missing score or a score of zero, similar to that done in Problem 9. d. There should now be 669,993 observations. Any thoughts on what biases are…
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