=+P13–18 Capital Structure Altin Greene is looking to buy a new apartment in Tirana, the capital of Albania. He visits Credins Bank, and reviews all the data that is required to get a loan. He must submit his personal financial data, like his income from work, expenses, and other existing loan payments. The bank then decides, based on specific ratios and data, whether to concede the loan. The list of requirements are:

(1) Monthly mortgage payments 6 25% of monthly gross (before-tax) income.

(2) Total monthly installment payments (including the mortgage payments) 6 35%

of monthly gross (before-tax) income.

Altin submits the following financial data:

Monthly gross (before-tax) income L120,000 Monthly installment loan obligations 15,000 Requested mortgage 12,000,000 Monthly mortgage payments 34,000