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9. Tom paid $17,000 in mortgage interest and $8,000 in property taxes last year. His...

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Accounting

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9. Tom paid $17,000 in mortgage interest and $8,000 in property taxes last year. His average tax rate is 21.5%, his marginal tax rate is 28%. Compute Tom's tax shield from the mortgage interest and property tax deduction. 10. Jill buys a house for $800k, lives there for exactly 10 years and sells it. Suppose Jill's annual cost of ownership is exactly equal to the annual rent she would have paid to live in the same house. Suppose the price of Jill's house grows 3.4% annually. Compute Jill's annual IRR from owning net of renting. (hint: look at the buy vs rent slides, assume no mortgage or buying/selling expenses.)

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