Exam 1 answers
Terms in this set (33)
which of the following is an example of an opportunity cost?
taking a class instead of working at your part-time job.
a personal financial plan specifies financial goals and describes
spending, financing, and investment plans
which of the following is not an asset?
your house which you rent
which of the following items is not a liability?
the wages you give up to take a class
____ is the process of forecasting future expenses and savings.
_____ allows acces to funds to cover any short-term cash deficiencies.
if your income exceeds the amount you spend, you should _____ your investments or _____ loans.
increase; repay existing
Jim has $1000 income from his job and $200 stock dividend income this mont. this month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. what is his cash inflow this month?
which of the following is not a cash inflow
many individuals tend ___ their cash inflows and ___ their outflows.
In budgeting, it is useful to compare ____ with the budgeted amounts to determine that accuracy or error of the budget and adjust it as necessary
both actual inflows and outflows
allison expects her monthly cash inflow after taxes to be $3000. she also has the following monthly expenses: rent, $750; student loan payment, $200; utilities, $150; food, $300; recreating, $600; car expenses, $200; clothing, $150. what is allison's net cash flow for the current month?
allision anticipates an addition car expense two months from no of $400 for new tires that she has not previously budgeted for. what action should allison take?
revise her car expenses over the next two months to allow for the additional cost of the new tires
which of the following is not considered an asset for a family
a leased car
the value of an asset you should receive if you sold the asset today is called
bills that are to paid off within a year are called
margaret has $5000 in her checking account, a home with a market value of $175000, and stocks valued at $10,000. margaret also has a credit card debt of $15,000. margaret's liquidity ratio is
liquid assets refers to
the ease of converting a financial resource into cash without a loss in value.
which of the following would increase your liquid assets?
making regular deposits to a savings account at your bank
the best measure of a person's or family's wealth is
everything else being equal, the ___ the interest rate, the ____ the final accumulation of money
a & b; higher:higher & lower:lower
byron is investigating a mutual fund that claims that $1000 today will be worth $5000 in five years. what is he solving for
if you invest $12,000 today at an interest rate of 10%, how much will you have in 10 years?
how much must you invest today at 8% interest in order to see your investment grow to $15,00 in 10 years?
to save for her newborn son's college education, Kelli Peterson will invest $1500 at the end of each year for the next 18 years. the interest rate she expects to earn on her investment is 9%. how much money will she have saved by the time her son turns 18?
judy would like to have $200,000 saved in her retirement account in 20years. at an interest rate of 10%, how much should she contribute each year?
the state lottery has just informed you that you won $1million to be paid out in the amount of $50,000 per year for the next 20 years. with the discount rate of 12%, what is the present value of your winnings?
gross income includes all of the following except
employer's current contribution to 401(k)
which of the following is not subject to immediate taxation?
contributions to your employer-sponsered retirement account
income earn from the sale of an asset for more than you paid for it is classified as a
the filing stats that yields the largest standard deduction per taxpayer is
head of household.
purchasing which of the following items on credit will help reduce your tax bill?
which of the following can be deducted from your taxes even if you do not itemize?
student loan interest.
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