1. To Commute or Not Team 3 Members: Andy Funes Ta-Lun Huang Justin A. Klotz Steven Roos

2. In this Presentation Commute or Not? Locations: LA & Palmdale Short & Long term: 5yrs, 15yrs, & 30yrs House, Car, Salary Tax, Interest Rate, Inflation Rate Cash Flow Diagram NPV Sensitivity Analysis

3. Setting the Stage 30 Years Old Engineer with Experience Married with Children Medium Size Family House: 3+ bedroom Working Location: El Segundo, CA Two Living Locations: Palmdale, 5miles radius of Palmdale Blvd off 14 freeway ramp Los Angles, 15 miles radius of El Segundo Blvd off 405 freeway ramp

4. Considerations: House Los Angeles Price: $625,000 Palmdale Price: $285,000 Home Interest Rate: 5.76% Home Appreciation: 7% Down Payment: 20% Appreciation Value Mortgage Payment Property Tax

5. Considerations: Car Price & Useful Life: 5yrs Down Payment: 20% Depreciation / Salvage Mileage: Annual Mileage 3750 vs. 36250 Interest Rate 6.35% Payment & Maintenance Gas: MPG & Fuel Price

6. Considerations: Salary Income / Adjusted Income Income Tax / Net Income Inflation: 3% MARR: 10% Use House, Car, and Salary Info. Develop NPV

7. Cash Flow Diagram Example

8. NPV 5 years15 years30 years Los Angeles$370,683.31$670,667.22 $797,738.40 Palmdale$335,895.01$613,357.97$787,135.66

9. Sensitivity Analysis Example: Appreciation Rate

10. Sensitivity Analysis Example: Maintenance Cost

11. The Conclusion LA is the superior choice More expensive on an annual basis Expenses of: Living in LA goes to Home Investment Living in Palmdale goes to Transportation Commute becomes more attractive when gas, maintenance are reduced significantly Time Value

12. Resource & Information Zillow http://www.zillow.comhttp://www.zillow.com Kelly Blue Book http://www.kbb.comhttp://www.kbb.com Sigalert http://www.sigalert.comhttp://www.sigalert.com Local Bank Real Estate Agency