Home mortgage analysis for cultivating crucial spreadsheet and model development skills |
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| Affiliation: | 1. College of Business, James Madison University, Harrisonburg, VA 22807, USA;2. R. B. Pamplin College of Business, Virginia Tech, Blacksburg, VA 24061, USA;1. Department of Stomatology, School of Dentistry, University of São Paulo, São Paulo, Brazil;2. Division of Dentistry, Mario Covas State Hospital of Santo André, São Paulo, Brazil;3. Albert Einstein Hospital, São Paulo, Brazil;4. Division of Dentistry, Hospital das Clinicas, Medical School, University of São Paulo, São Paulo, Brazil;5. Laboratory of Virology, Institute of Tropical Medicine of São Paulo, University of São Paulo, São Paulo, Brazil;1. Department of Medicine, Division of Cardiology, Cardiac Arrhythmia Center, Montefiore-Einstein Center for Heart and Vascular Care, Bronx, New York;2. University of California, Los Angeles (UCLA) Cardiac Arrhythmia Center, Los Angeles, California;3. Department of Cardiology, The Royal Melbourne Hospital, The University of Melbourne, Parkville, Victoria, Australia;4. Texas Cardiac Arrhythmia Institute at St David’s Medical Center, Austin, Texas;6. Department of Cardiology, Westmead Hospital, University of Sydney, Sydney, New South Wales, Australia;1. Department of Radiotherapy, Division of Imaging & Oncology, University Medical Center Utrecht, , The Netherlands;2. Computational Imaging Group for MR diagnostics & therapy, Center for Image Sciences, University Medical Center Utrecht, , The Netherlands;3. Princess Máxima Center for Pediatric Oncology, Utrecht, The Netherlands;1. The National Allergy Research Centre, Herlev-Gentofte Hospital, University of Copenhagen, Hellerup, Denmark;2. Department of Dermatology and Allergy, Herlev-Gentofte Hospital, University of Copenhagen, Hellerup, Denmark;3. Novo Nordisk Foundation (NNF) Center for Protein Research, Faculty of Health and Medical Sciences, University of Copenhagen, Hellerup, Denmark;4. LEO Foundation Skin Immunology Research Center, Faculty of Health and Medical Sciences, University of Copenhagen, Hellerup, Denmark |
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| Abstract: | Accounting practitioners and academics have identified spreadsheet and model development skills as important for accounting graduates to possess. We present an adaptable mortgage analysis project that provides a practical setting in which students can develop critical spreadsheet modeling skills while demonstrating knowledge of several important principles of accounting and finance. The developed spreadsheet model is designed in a structured manner to permit changing the necessary financial terms and facilitates performing sensitivity analysis on critical variables.The analysis requires an informed decision be made between employing a fixed rate mortgage or an adjustable rate mortgage (ARM) for financing a home purchase. Important theoretical skills required to arrive at an acceptable solution include understanding of present value concepts, effective rate method of interest calculation, and amortization of principle balance. The student must also verify proficiency with the necessary theoretical and practical skills of effective spreadsheet design and model development |
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