(pdf) Business Finance Assignment (solved)

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Authors Note:

BUSINESS FINANCE
1
Table of Contents
1. Investigating the historical housing price of Melbourne and justifying the assumptions for
the housing price:.......................................................................................................................2
2. Investigating the historical income data of Melbourne and justifying the assumptions for
the income data:.........................................................................................................................6
3. Calculating the net income by using the ATO calculator, while detecting the home loan
rate and maximum amount it could borrow in current sphere:..................................................8
4. Calculating the stamp duty situated with property purchase, while detecting the house price
client can afford:........................................................................................................................9
5. Drafting the financial Plan where upfront payment of 20% is calculated and 5% upfront
payment in calculated for loan:................................................................................................10
6. Calculating whether increment in interest payment can hamper interest payment capability
of the lender:............................................................................................................................12
7. Providing a relevant plan with detailed risk entailed by the assumption made for the
financial plan:...........................................................................................................................13
Reference and Bibliography:....................................................................................................14

BUSINESS FINANCE
2
1. Investigating the historical housing price of Melbourne and justifying the
assumptions for the housing price:
The growth rate is calculated with the help of historical price change of housing in
Melbourne from 2002 to 2017, which has helped in understanding the level of price change
that might incur in future. In addition, the growth rate is mainly calculated with the help of
yearly difference between the old price and the new price. This detection of the changing
price percentage might help in understanding the level of growth, which was seen between
the prices of property over the period. The average change in the price of the property value
over the period of 2002 to 2017 is mainly used in calculating the next 20 years price change
in housing property. The data is mainly valuated from ATO, where all the relevant data is
calculated, which helps in understand the future price of property in Melbourne. The price
change of housing property is mainly helpful in understanding the expense, which will incur
by technical migrant. The price change in property over the period of 20 years is relatively
depicted in the below table, which could help in understating the level of expense, which
could incur to achieve the Australian Dream (Tradingeconomics.com, 2018).
Prices in Next 20 Years
Year Quarter Price (“000)
0 $ 713.00
1 Q1 $ 724.40
Q2 $ 735.98
Q3 $ 747.74
Q4 $ 759.69
2 Q1 $ 771.84

BUSINESS FINANCE
3
Q2 $ 784.17
Q3 $ 796.71
Q4 $ 809.44
3 Q1 $ 822.38
Q2 $ 835.53
Q3 $ 848.88
Q4 $ 862.45
4 Q1 $ 876.24
Q2 $ 890.24
Q3 $ 904.47
Q4 $ 918.93
5 Q1 $ 933.62
Q2 $ 948.54
Q3 $ 963.71
Q4 $ 979.11
6 Q1 $ 994.76
Q2 $ 1,010.66
Q3 $ 1,026.82
Q4 $ 1,043.23
7 Q1 $ 1,059.91
Q2 $ 1,076.85
Q3 $ 1,094.06
Q4 $ 1,111.55
8 Q1 $ 1,129.32