Question 1 (16 marks) James and Lisa Brown are trying to figure out their current financial situation. They have listed the following items from their most recent statements. Their after-tax household income is $3,800 per month. Savings account: $2,200 Checking account: $600 Credit card balance: $2,000 Car market value: $8,000 Condo market value: $60,000 Mortgage loan balance: $45,000 Personal properties; market value: $2,000 Investment: $15,000 Retirement savings: $30,000 (a) What is their net worth? What does their net worth imply for their financial condition? (4 marks) (b) Assume that their monthly living expense is 3,500. And they use the savings in savings and checking account as an emergency fund. What is their monthly living expense covered ratio? (2 marks) Comment on this ratio? (2 marks) (c) Describe the major costs related to their credit cards. (4 marks) (d) If they would like to sell the condo at the current market price to pay off the current mortgage loan and use the surplus to pay for the downpayment of a bigger house worth $110,000. How will this decision affect their net worth in the short run and the long run? (4 marks)