{ From user David, Model Rentvsbuya at 22-Mar-2013 5:25:39 PM }
SoftwareVersion 4.4.4


{ System Variables with non-default values: }
Time := Sequence(1,Years,1)
DistribSize := 30
TypeChecking := 1
Checking := 1
SaveOptions := 2
SaveValues := 0
{!40000|Att_ContLineStyle Graph_Pdf_Valdim: 6}
{!40300|Sys_DomainSelfIndex := 1}
{!40400|Sys_PdfSmoothMethod := 1}

{!40300|ProactivelyEvaluate Index: 1}

Attribute Reference
Attribute Date_bough


Model Rentvsbuya
Title: Rent vs. Buy Analysis
Description: Financial model comparing the Net Present Value of renting vs. buying a house.~
~
This model uses cash flow conventions:  a node with a negative value means the cash is flowing out (being spent), while a node with a positive value means the cash is flowing in (being received).~

Author: Max Henrion
Date: Wed, Jun 6, 1990 12:38 AM
SaveAuthor: David
SaveDate: Fri, Mar 22, 2013 5:25 PM
DefaultSize: 52,20
DiagState: 2,45,39,792,380,1
NodeColor: -1,-6554,-19660
DiagramColor: 32348,-9825,-8739
FontStyle: Helvetica, 12
FileInfo: 0,Model Rentvsbuya,2,2,0,0,C:\Documents and Settings\David\Desktop\work\Changes to wiki\What's new in ACP\Rent vs Buy Analysis ACP_current_user.ana
{!40400|Att_clearTypeFonts: -1}

Decision Price
Title: Buying price
Units: $
Description: Buying price of house.
Definition: 140K
NodeLocation: 80,32
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,136,146,224,138,0,MIDM
Aliases: FormNode Buying_price
NodeColor: -26215,-1,-16110

Variable Years
Title: Time horizon
Units: years
Description: Length of time from buying to selling (or time horizon for this analysis).~
Note this must be an integer.
Definition: 10
NodeLocation: 224,168
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,40,50,224,138,0,MIDM
NodeColor: 4658,-14548,-1
DisplayOutputs: Variable Pv_rent

Variable Pv_total_cost
Title: Costs of buying and renting
Units: $
Description: This node compare the net present value of buying to the net present value of renting.
Definition: Table(Buy_or_rent)( ~
Cost_to_buy,Pv_rent)
NodeLocation: 368,144,1
NodeSize: 56,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,113,72
DefnState: 1,43,173,619,149,0,MIDM
ValueState: 1,131,96,454,373,1,PDFP
NodeColor: -26215,-13108,-1
GraphSetup: Graphtool:0~
Distresol:10~
Diststeps:1~
Cdfresol:5~
Cdfsteps:1~
Symbolsize:6~
Linestyle:1~
Frame:1~
Grid:1~
Ticks:1~
Mesh:1~
Scales:1~
Rotation:45~
Tilt:0~
Depth:70~
Frameauto:1~
Showkey:1~
Xminimum:-300K~
Xmaximum:100K~
Yminimum:0~
Ymaximum:50u~
Zminimum:1~
Zmaximum:2~
Xintervals:0~
Yintervals:0~
Includexzero:0~
Includeyzero:1~
Includezzero:1~
Statsselect:[1,1,1,1,1,0,0,0]~
Probindex:[0.05,0.25,0.5,0.75,0.95]~


Variable Discount
Title: Discount rate
Units: %/year
Description: Discount rate for converting a future cash flow into a single value (present value). The discount rate represents the values of the buyer at the present time.
Definition: 6
NodeLocation: 80,168
NodeSize: 52,20
NodeInfo: 1,0,1,1,1,1,0
ValueState: 1,72,82,224,138,0,MIDM
Aliases: Alias Al2
NodeColor: 4658,-14548,-1

Chance Appreciation
Title: Appreciation rate
Units: %/year
Description: Average annual percent rate of appreciation (including inflation) over the ownership period.
Definition: Normal( Inflation, 3 )
NodeLocation: 224,32
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,200,60
ValueState: 1,167,98,420,231,0,MIDM
Aliases: FormNode Appreciation_rate
NodeColor: 20492,-6282,-1
NumberFormat: 1,D,4,0,0,0

Decision Buy_or_rent
{!40000|Att_PrevIndexValue: ['Buy','Rent']}
Title: Buy or rent
Description: This is the decision to buy or rent.
Definition: ['Buy','Rent']
NodeLocation: 368,32
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,152,162,240,138,0,MIDM
NodeColor: -26215,-1,-16110

Chance Inflation
Title: Rate of inflation
Units: %/year
Description: Average rate of inflation over the ownership period, or time horizon.
Definition: Normal( 3.5, 1.3 )
NodeLocation: 80,96
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,133,151
ValueState: 1,72,82,416,303,1,PDFP
NodeColor: 20492,-6282,-1

Module Buy
Title: Cost to Buy
Author: korsan
Date: Wed, Feb 8, 1995 11:39 AM
DefaultSize: 48,24
NodeLocation: 224,96
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
DiagState: 2,54,74,443,290,1
NodeColor: -1,-10283,-21468

Variable Downpaymt
Title: Down~
payment
Units: $
Description: Down payment amount at time of purchase.
Definition: (-Percent_down_payment/100)*Price
NodeLocation: 72,176
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0,,0
WindState: 1,71,294
ValueState: 1,40,50,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Mortgage
Title: Mortgage loan amount
Units: $
Description: Total mortgage (loan) amount received.
Definition: Price + DownPaymt
NodeLocation: 72,104
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,136,146,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Module Pv_ownership_cost
Title: Out-of-pocket costs to own
Description: Annual costs, such as mortgage payments, taxes, insurance and maintenance.
Author: M.H.
Date: Wed, Sep 26, 1990 11:30 PM
SaveAuthor: henrion
SaveDate: Tue, Oct 16, 1990 4:04 PM
DefaultSize: 48,24
NodeLocation: 216,104
NodeSize: 52,20
DiagState: 1,42,93,586,294,1
NodeColor: -1,-6554,-19660
FontStyle: Helvetica, 12

Chance Taxrate
Title: Marginal~
tax rate
Units: %
Description: Marginal tax rate including federal and state taxes.  Assumes top brackets, ignoring exclusion of deductions.~
~
Uncertainty about possible changes in Federal and/or state taxes, of plus or minus 2%.
Definition: 33%+9%+Normal(0,2%)
NodeLocation: 72,104
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,136,146,416,303,1,PDFP
NodeColor: 20492,-6282,-1

Variable Payments
Title: Mortgage~
payments
Units: $/year
Description: Annual payments on mortgage (interest plus principal).  Assumes fixed rate mortgage, over 30 years; equal payments at the end of each month.
Definition: 12*Pmt(Mort_rate/1200,360,Mortgage)
NodeLocation: 216,40
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,97,84
ValueState: 1,88,98,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Tax_red
Title: Reduction in income taxes
Units: $/year
Description: Annual reduction in income taxes due to deductibility of interest payments.
Definition: -Taxrate*(Interest_pay+Property_tax)
NodeLocation: 216,104
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,186,479
ValueState: 1,72,82,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Ann_cash_flow
Title: Cash flow of ownership costs
Units: $
Description: A table of the annual cash flow related to ownership, including mortgage payments, property taxes, maintenance, and insurance, less tax deductions.
Definition: Payments+Property_tax+Insurance+Maintenance+Tax_red
NodeLocation: 360,104
NodeSize: 52,28
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,40,50
ValueState: 1,120,130,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Interest_pay
Title: Interest~
payments
Units: $/year
Description: A table of the annual payments of interest, indexed by year.
Definition: For x = Time Do Cumipmt(Mort_rate/1200,360,Mortgage,12*x-11,12*x)
NodeLocation: 72,40
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,92,122
ValueState: 1,152,162,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Property_tax
Title: Property~
taxes
Units: $/year
Description: Annual property taxes.  Assumes state tax of 1%  plus 0.15% local taxes., growing at the rate of inflation.
Definition: -((1+Inflation/100)^Time)*Price*1.5%
NodeLocation: 72,168
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,104,114,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Chance Maintenance
Title: Maintenance
Units: $/year
Description: Annual maintenance costs for the house (no improvements).  Assumes a normal distribution with median at 1% of purchase price, growing with inflation.
Definition: -((1+Inflation/100)^Time)*Normal(1%*Price, .5%*Price)
NodeLocation: 216,232
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,136,146,416,303,0,MIDM
NodeColor: 20492,-6282,-1
DisplayInputs: Chance Maintenance1

Chance Insurance
Title: Insurance
Units: $/year
Description: Annual cost of insuring the house.  Assumes cost of house is 50% of original price, and insurance is 0.3%, growing at the rate of inflation.
Definition: -((1+Inflation/100)^Time)*Price*50%*Lognormal(.3%, 1.5)
NodeLocation: 72,232
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,152,162,416,303,0,MIDM
NodeColor: 20492,-6282,-1
ReformVal: [Time,ProbIndex]

Variable Pv_own
Title: Present value of ownership costs
Description: Present value of the cash flow stream of ownership costs
Definition: Npv(Discount/100,Ann_cash_flow,Time)
NodeLocation: 512,104
NodeSize: 52,28
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,152,162,416,303,1,PDFP
NodeColor: 4658,-14548,-1
GraphSetup: Graphtool:0~
Distresol:10~
Diststeps:1~
Cdfresol:5~
Cdfsteps:1~
Symbolsize:6~
Linestyle:1~
Frame:1~
Grid:1~
Ticks:1~
Mesh:1~
Scales:1~
Rotation:0~
Tilt:0~
Depth:70~
Frameauto:1~
Showkey:1~
Xminimum:-200K~
Xmaximum:-120K~
Yminimum:0~
Ymaximum:100u~
Zminimum:1~
Zmaximum:1~
Xintervals:0~
Yintervals:0~
Includexzero:0~
Includeyzero:1~
Includezzero:1~
Statsselect:[1,1,1,1,1,0,0,0]~
Probindex:[0.05,0.25,0.5,0.75,0.95]~


Close Pv_ownership_cost

Variable Mort_rate
Title: Mortgage interest rate
Units: %/year
Description: Annual interest rate on mortgage.
Definition: 9.5
NodeLocation: 216,32
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,1325,86
ValueState: 1,88,282,460,192,0,MIDM
NodeColor: 4658,-14548,-1

Module Pv_sales_proceeds
Title: Future sales proceeds
Author: M.H.
Date: Fri, Jan 1, 1904 10:39 AM
SaveAuthor: henrion
SaveDate: Thu, Oct 18, 1990 3:29 PM
DefaultSize: 48,24
NodeLocation: 216,184
NodeSize: 52,20
DiagState: 1,70,87,461,259,1
NodeColor: -1,-6554,-19660
FontStyle: Helvetica, 12

Variable Princ_pay
Title: Principal payments made on mortgage
Units: $/year
Description: A table of the annual payments of principal, indexed by year.
Definition: For x = Time Do Cumprinc(Mort_rate/1200,360,Mortgage,12*x-11,12*x)
NodeLocation: 72,184
NodeSize: 56,28
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,136,146,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Profit
Title: Net sales proceeds
Units: $K
Description: Net proceeds from selling the house at the end of the period of ownership.  Equal to selling price less selling costs and mortgage principal remaining.
Definition: Sell_price+Selling_cost-End_mortgage
NodeLocation: 216,112
NodeSize: 56,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,88,98,416,303,1,PDFP
NodeColor: 4658,-14548,-1

Variable Sell_price
Title: Selling  price
Units: $
Description: Sales price, equal to purchase price times compounded average annual appreciation.
Definition: Price * (1+Appreciation/100)^Years
NodeLocation: 72,112
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,88,98
ValueState: 1,88,98,416,303,1,PDFP
NodeColor: 4658,-14548,-1

Variable End_mortgage
Title: Mortgage principal remaining
Units: $
Description: Outstanding mortgage at selling time.
Definition: Mortgage + Sum(Princ_pay, Time)
NodeLocation: 216,184
NodeSize: 56,28
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,56,66,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Selling_cost
Title: Selling costs
Units: $
Description: Cost of selling the house. Assumes 6% commission to agent + 1% "fix-up" and owner's closing costs.
Definition: -7%  * Sell_price
NodeLocation: 144,40
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,104,114,416,303,1,PDFP
NodeColor: 4658,-14548,-1

Variable Pv_sale
Title: Present value of sale
Units: $
Description: Present value of the sales proceeds.
Definition: Profit/(1+Discount/100)^Years
NodeLocation: 360,112
NodeSize: 56,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,88,98,416,303,1,PDFP
NodeColor: 4658,-14548,-1

Close Pv_sales_proceeds

Module Opportunity_cost
Title: Opportunity cost
Author: korsan
Date: Fri, Feb 3, 1995 4:21 PM
DefaultSize: 48,24
NodeLocation: 216,248
NodeSize: 52,20
DiagState: 1,62,147,473,221,1
NodeColor: -1,-6554,-19660

Variable Foregone_interest
Title: Foregone interest on down payment
Units: $
Description: Foregone posttax interest that could have been earned from investing the down payment and moving costs at the savings interest rate; "opportunity cost".
Definition: (DownPaymt+Moving_costs)*(((1+ Interest_dep/100)^Years)- 1)
NodeLocation: 216,72
NodeSize: 52,28
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,104,114,416,303,1,PDFP
NodeColor: 4658,-14548,-1

Variable Interest_dep
Title: Savings interest rate
Units: %/year
Description: Post-tax interest rate available on the down payment if it were invested elsewhere, e.g. in a CD, or municipal bond.  Assumed equal to the rate of inflation.
Definition: Inflation
NodeLocation: 80,72
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
NodeColor: 4658,-14548,-1

Variable Pv_forgone_interest
Title: Present value of foregone interest
Description: Present value of the interest that could be earned on the down payment, if it were invested instead.
Definition: Foregone_interest/(1+Discount/100)^Years
NodeLocation: 360,72
NodeSize: 52,28
NodeInfo: 1,1,1,1,1,1,0
WindState: 1,151,196
ValueState: 1,104,114,416,303,1,PDFP
NodeColor: 4658,-14548,-1
NumberFormat: 1,D,3,2,0,0

Alias Al2
Title: Discount rate
Definition: 1
NodeLocation: 216,152
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
NodeColor: 4658,-14548,-1
Original: Discount

Close Opportunity_cost

Variable Cost_to_buy
Title: Present Value of Cost to Buy
Description: Total present value of the cash flow related to buying, including the down payment, annual out-of-pocket costs, proceeds of future sale, and forgone interest on the down payment (opportunity cost).
Definition: Pv_own+Pv_sale+Pv_forgone_interest+Downpaymt+Moving_costs
NodeLocation: 360,104
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 2,56,66,468,306,1,PDFP
NodeColor: 4658,-14548,-1
GraphSetup: Graphtool:0~
Distresol:10~
Diststeps:1~
Cdfresol:5~
Cdfsteps:1~
Symbolsize:6~
Linestyle:1~
Frame:1~
Grid:1~
Ticks:1~
Mesh:1~
Scales:1~
Rotation:45~
Tilt:0~
Depth:70~
Frameauto:1~
Showkey:1~
Xminimum:-300K~
Xmaximum:100K~
Yminimum:0~
Ymaximum:20u~
Zminimum:1~
Zmaximum:1~
Xintervals:0~
Yintervals:0~
Includexzero:0~
Includeyzero:0~
Includezzero:0~
Statsselect:[1,1,1,1,1,0,0,0]~
Probindex:[0.05,0.25,0.5,0.75,0.95]~


Variable Moving_costs
Title: Moving Costs
Units: $
Description: Moving, move-in, and cash closing costs.  Assumed to be 1.5% of the Buying price.
Definition: -1.5%*Price
NodeLocation: 360,248
NodeSize: 48,20
NodeInfo: 1,1,1,1,1,1,0
ValueState: 1,152,162,416,303,0,MIDM
NodeColor: 4658,-14548,-1

Variable Percent_down_payment
Title: Percent down payment
Units: %
Description: The percent down payment the buyer chooses to make on her house.~
Note units are in percent.
Definition: 20
NodeLocation: 72,248
NodeSize: 52,20
WindState: 1,147,197
NodeColor: 0,-13108,-1

Close Buy

Module Renting
Title: Cost to Rent
Author: korsan
Date: Wed, Feb 8, 1995 11:39 AM
DefaultSize: 52,20
NodeLocation: 224,240
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0
DiagState: 1,60,99,467,144,3
NodeColor: -1,-10283,-21468

Variable Rent
Title: Cash flow of rental costs
Units: $/year
Description: A table of the cost to rent, indexed by time.  Rental cost is assumed to grow over time at the rate of inflation.
Definition: Monthly_rent*12*(1 + Inflation/100)^Time
NodeLocation: 216,72
NodeSize: 52,20
NodeInfo: 1,1,1,1,1,1,0,,0
ValueState: 1,104,114,416,303,0,MIDM
NodeColor: -19660,-9830,-1
DisplayOutputs: Objective Net_diff

Variable Pv_rent
Title: Present value of cost to rent
Definition: -Npv(Discount/100,Rent,Time)
NodeLocation: 360,72
NodeSize: 52,20
ValueState: 1,56,66,416,303,1,PDFP
NodeColor: -19660,-9830,-1

Variable Monthly_rent
Title: Monthly Rent
Units: $
Description: Monthly rental cost at the start of the time period.
Definition: 1200
NodeLocation: 72,72
NodeSize: 52,20
ValueState: 1,136,146,416,303,0,MIDM
NodeColor: -19660,-9830,-1

Close Renting

Objective Difference
Title: Difference between buying and renting
Units: $
Description: The difference between buying and renting.  A positive number means buying costs less; a negative number means renting costs less.
Definition: Pv_total_cost[Buy_or_rent='Buy']-Pv_total_cost[Buy_or_rent='Rent']
NodeLocation: 368,224
NodeSize: 56,28
WindState: 1,120,130
ValueState: 2,137,109,416,303,1,PDFP
GraphSetup: Graphtool:0~
Distresol:10~
Diststeps:1~
Cdfresol:5~
Cdfsteps:1~
Symbolsize:6~
Linestyle:1~
Frame:1~
Grid:1~
Ticks:1~
Mesh:1~
Scales:1~
Rotation:45~
Tilt:0~
Depth:70~
Frameauto:1~
Showkey:1~
Xminimum:-100K~
Xmaximum:200K~
Yminimum:0~
Ymaximum:40u~
Zminimum:1~
Zmaximum:1~
Xintervals:0~
Yintervals:0~
Includexzero:0~
Includeyzero:0~
Includezzero:0~
Statsselect:[1,1,1,1,1,0,0,0]~
Probindex:[0.05,0.25,0.5,0.75,0.95]~


Index Difference_between_b
{!40000|Att_PrevIndexValue: ['Appreciation rate','Rate of inflation','Marginal tax rate','Maintenance','Insurance']}
Title: Difference between buying and renting Inputs
Description: This node was created by the "Make Importance" command.  It has been modified manually to average the Maintenance and Insurance over the time period (otherwise, this would evaluate to having a second dimension, time).
Definition: Table(Self)(~
Appreciation,Inflation,Taxrate,Average(Maintenance,Time),Average(Insurance,Time))
IndexVals: ['Appreciation rate','Rate of inflation','Marginal tax rate','Maintenance','Insurance']
NodeLocation: 368,416
NodeSize: 56,36
DefnState: 1,56,66,456,179,0,MIDM
ValueState: 1,72,82,570,303,1,MIDM

Variable Difference_between_1
Title: Difference between buying and renting Importance
Description: This node is created by the "Make Importance" command.  It shows the relative contributions of the uncertainty in the input nodes to the uncertainty in the output node.
Definition: Abs( RankCorrel( Difference_between_b, Difference ) )
NodeLocation: 368,312
NodeSize: 56,36
ValueState: 1,40,54,595,319,1,MIDM
ReformVal: [Time,Difference_between_b]

Form Parametric_analysis
Title: Parametric Analysis
Description: This module contains input nodes for the variables on which sensitivity analysis is performed in the Tutorial.~
~
These input nodes are needed because in Browse mode, you can change the value or type of definition of only input nodes.  Sensitivity analysis involves changing values as well as changing types (scalar to list, probability distribution to list).
Author: lynda
Date: Thu, May 2, 1996 11:49 AM
NodeLocation: 224,416
NodeSize: 52,20
NodeInfo: 1,0,0,1,1,1,0,,0,
DiagState: 1,152,162,457,202,17

FormNode Appreciation_rate
Title: Appreciation rate
Definition: 0
NodeLocation: 200,32
NodeSize: 132,20
NodeColor: 20492,-6282,-1
Original: Appreciation

FormNode Buying_price
Title: Buying price
Definition: 0
NodeLocation: 200,104
NodeSize: 132,20
NodeColor: -26215,-1,-16110
Original: Price

Close Parametric_analysis

Variable ACP_current_user
Title: ACP current user
NodeLocation: 104,312,1
NodeSize: 56,24
NodeInfo: 1,1,1,1,1,1,0,,1,,0
WindState: 2,256,218,375,99
NodeColor: 65535,54067,19661

Close Rentvsbuya