Exam 1 30/40 Finc
Terms in this set (40)
which of the following would not be a factor in evaluating your current financial position
- lottery winnings(correct)
which of the following is not a decision you would probably encounter in managing your budget
- how you will allocate your estate among your heirs(correct)
-how long you will take to pay off a specific loan
-how much money you should attempt to save each month
-what expenses you should anticipate
the financial crisis of 2008-09 affected the financial position of individuals in all of the following ways except which of these
-employers could not afford to give a raise
- the demand for homes increased because more homeowners were trying to sale their home(correct)
-the value of many investments declined
-their was a reduction in new job opportunities
which of the following statements is not true regarding education and financial position?
-the more eduction you have the higher earnings will likely be
-higher education always guarantees higher income(correct)
-before you choose a major you should consider your skills, interest and career paths
- your financial position is highly influenced by the amount of education you pursue
opportunity cost refers to
what you give up as a result of making a decision
to increase your savings,
income must be increased
____ allows access to funds to cover any short term cash deficiencies
a worker making $20 per hour decides to take unpaid leave from work to attend a graduation ceremony. assuming the worker works an 8 hour day, has a total tax rate of 70% and receives a 5% contribution from his employer to his 401k, what is the workers opportunity cost
Which of the following would not be considered a very good investment?
-mutual fund of stocks and bonds
-a new television set(correct)
the act of determining how wealth will be distributed before or upon death is
which of the following is not a liquid asset?
-corporate stock you own outright(correct)
-money in a savings account
- cash in your pocket
-money in your checking account
Jennifer has assets of $100,000 and debt of $10,000. She could
borrow more money since her debt ratio is low
the personal cash flow statement measures
-cash inflows and outflows
the cash flow statement reports a persons or family`s
current income and payments
cash outflows are also called
Nancy has $40,000 of annual disposable income and saves $8,000 a year. Her savings rate is.
if you do not budget for unexpected expenses in a given month, you will likely experience an
which of the following statements about stocks is not true?
-corporations issue stock to obtain money for special projects
-investments in stocks are considered liquid assets(correct)
-stocks represent partial ownership of a firm
- the market value of stocks changes daily
Jeff has $1000 dollars salary and $100 dividend income this month. This month Jim has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. what is his net cash flow for the month
a personal balance sheet presents
income and expenses for a period of time
in order to take advantage of the time value of money you should do all of the following except
- pay bills a little later than the due dates to take advantage of month- ending interest on your savings account
how many years will it take $500 to grow to $1,039.50 if invested at 5% compounded annually
how many years will it take $35 to grow to $53.87 if invested at 9% compounded annually
the concept of the time value of money is important to financial decision making because
-emphasizes earning a return of interest on the money you invested
- it recognizes that $1 today has more value than $1 received a year from now
- it can be applied to future cash flows in order to compare different streams of income
-all of these(correct)
which of the following is not an example of a future value?
-balance in checking account today(correct)
-saving account balance in 5 years
-mortgage balance in 10 years
-value of retirement account in 20 years
Sandy wants to know how much she needs to save today to have $5,000 in 5 years at 7 % interest rate. What table should she use?
present value of $1
the time value of money can be applied to all of the following except
- investment valuation (correct)
- current market value of your home
Carol would like to have $500,000 saved in her retirement account in 30 years at an interest rate of of 10%. How much should she contribute each year?
To save for her newborns sons college education, Kelly Peterson will invest 1500 at the ned of the year for the next 18 years. she expects a 9% interest rate. how much will she have saved by the time her son turns 18?
Berkey invest 10,000 in a money market account at his local bank. he earns annual interest of 8% for 7 years. How much interest will he earn on his investment during this time period?
the knowledge of tax laws can help you
protect te transfer of wealth at death
all of these(correct)
Gross income and adjusted gross income can be the same if you do not have any special adjustments. Which of the following is not one of these special adjustments?
-IRA contributions are subtracted from gross income
-Alimony payments are deducted from gross income
-interest and dividend income is part of the income calculation
- capital gains are deducted and capital losses are added (correct)
a allowable amount which taxpayers can claim for themselves and dependents is called
Chris is a single college student and earns $13,000 from part time job. He has taxable interest income of $1400 and itemized deductions of $690. Calculate his taxable income.
interest income would come from earnings on
sallys adjusted gross income is 38,000. she doesnt own a home but has charitable contributions of 1500 and interest on her car of 2100. This year she also has medical expenses of 2000. she is allowed a standard deduction of 5950 and one personal exemption of 3800. what is her taxable income
a branch of the US treasury department called the ____ administers the federal tax system
Internal Revenue Service
the tax relief act of 2001
provided educational incentives to most taxpayers
Which tax form is generally used by taxpayers whose filing status is married, has no dependents, and whose taxable income is less than $100,000
Which item cannot be taken as an itemized deduction
rela estate taxes
child and dependent care expenses(correct)