If spending exceeds the amount of your income over a period of time, your best option is probably to. To qualify for "head of household" you must, If you are a surviving spouse, you may continue to use the married filing jointly tax rates unless. Margaret's liquidity ratio is, Nancy has $40,000 of annual disposable income and saves $8,000 a year. Online Quiz #1: Chapter 1 — Understanding the Financial Planning Process ACE 240 Online MULTIPLE CHOICE: CHOOSE THE BEST ANSWER 1. What financial services are available through online and mobile systems? STUDY. Which of the following is not an acceptable method of reducing your tax bill? Test. What are two methods insurance companies use in settling claims? If your current debt to asset ratio is 50%, which of the following will increase it? Which of the following tables should she use? Which of the following decisions would involve the use of the future value of $1? The increased mortgage payment was in effect the remainder of the year. Which of the following is not taxable for income tax purposes? The financial crisis of 2008-09 affected the financial position of individuals in all of the following ways except which of these? What is he solving for using his financial calculator? If you have current assets of $20,000 and current liabilities of $10,000, then you. If you take money out of your savings account to pay off a credit card your liquidity ratio will, If you sell stock from your portfolio to pay off your car loan, your debt ratio of 0.5 will, Margaret has $5,000 in her checking account, a home with a market value of $175,000, and stocks valued at $10,000. Personal Financial Goals. tax exempt is not subject to tax and will never be taxed. The process of obtaining ________ values is referred to as discounting. Josh has decided to take a course at the local community college that could help him get a promotion at work. Most investments are subject to ________, which is the uncertainty surrounding their potential return. She also has the following monthly expenses: Rent, $750; student loan payment, $200; utilities, $150; food, $300; recreation, $600; car expenses, $200; clothing, $150. ________ management involves decisions regarding how much credit you need to support spending and which sources of credit to use. With a discount rate of 12%, what is the present value of your winnings? Jane purchased General Motors stock seven years ago for $20,000. All of the following affect cash outflows except, If both a husband and wife are employed, their consumption behavior will, Cash flow can be increased by all of the following except. person with money in savings account would SUFFER, 5+ years, saving for retirement, college for your children, owning a home, main characteristics of useful financial goals. car insurance 50/200/75 what do these numbers mean? Earnings on an individual retirement account c. Education IRA earnings used for college expenses d. Income of U.S. citizens working in another country. The difference between an ordinary annuity and an annuity due is with an annuity due the payments occur at the ________ of each period. Your net worth will not be increased by which of the following actions? Flashcards. In 2012, self-employed individuals pay FICA taxes at a rate of. ) Don wants to know how much he needs to save every year to amass $15,000 in five years at a 5% interest rate. Cash flows are affected by financial planning decisions. If you are a married taxpayer, you may use the ________ filing status. A high school student with an after-school job and interest earnings of $480 from savings accounts b. State personal income taxes paid b. Charitable donations c. Expenses for adopting. The process of obtaining ________ values is referred to as compounding. Her savings rate is, If you save the same dollar amount from each paycheck during your career as your income increases, your savings rate will. Which of the following would be a long-term goal? What table would you use to calculate the value of this contract in today's dollars? Which of the following is not a liquid asset? To determine how long it would take an investment to double at 10 percent, you could scan down the 10% column until you reach a factor of approximately 2.0 on the ________ table. Josh currently earns $18.50 per hour. In preparation of her 2012 tax return, Stephanie should file as, All reportable income from any source is called, Gross income includes all of the following except. How many exemptions should George claim on his tax return? Insurance planning is not designed to protect your wealth in which of the following ways? Which of the following could save a smaller proportion of their earnings to achieve the same level of wealth? The wages that you forego when you leave work early to attend class is an example of a(n) ________. The concept of time value of money is important to financial decision making because. Information can be easily found on Web sites that will assist you in determining all of the following except. actual cash value is where the insured person receives compensation based on the current cost of damage or lost item, 5 factors affect home owners insurance cost, 1. bodily injury liability insurance for an accident you were not responsible for, Automotive liability coverage is usually expressed by three numbers. put a certain % of each paycheck into a savings account (money sheltering), payroll deduction offered by employers where they automatically put a certain % of your paycheck and deposits it into savings, saving coins, eliminate excess spending (eating out, buying brand name), Balance sheet, Cash flow statement, or budget--. Answers to End-of-Chapter Review Questions 1. Created by. Byron is investigating a mutual fund that claims that $1,000 today will be worth $5,000 in five years. Recommend three financial goals and related activities for someone in each of the following circumstances: a. When would you use the standard deduction instead of itemized deductions? Chapter 1 Personal Financial Planning: An Introduction True/False Questions T F 1. The concept that a dollar received today has more value than a dollar received in the future because of the interest it can earn is called the ________. Your ability to access funds to cover any short-term cash deficiencies is your ________. Start studying PERSONAL FINANCIAL MANAGEMENT TEST #1. When you own a house as a primary residence. what does personal balance sheet tell you about your financial situation? All of the following are types of nontaxable income except. An expense that could be included in the itemized deductions of a taxpayer is. Cram.com makes it easy to … This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. Yogi Berra Jr. has agreed to play for the New York Mets for $4 million per year for the next 10 years. Josh normally works until 5 p.m. each day, but because of the drive time to the community college, he will need to leave work at 3 p.m. on class days. Match. safety, money market accounts at banks are covered by federal deposit insurance whereas funds do not have any coverage. FICA taxes include two components, which consist of. If your net cash inflows exceed your net cash outflows, you can increase your net worth by investing the difference in more ________. Future and present values are dependent upon all of the following except, If you are presented with an offer to accept payment now or a greater amount in the future, you would use (assuming you can invest the money at a known rate), As the time period until receipt increases, the present value of an amount at a fixed interest rate. The accumulation of interest over time is called. Which of the following is an example of an opportunity cost? Start studying Personal Financial Planning (Exam 1). Which of the following usually affects cash inflows the most? Paying off a credit card with cash will have which of the following effects on net worth? Which of the following goals would be easiest to measure? ) Present and future values concepts are not applied to which of the following? compounding as it applies to a lump sum or single money amount, compounding as it applies to periodic deposits--stream of equal payments that are recieved/paid at equal intervals in time. View Test Prep - Personal Finance Test Bank Chapter 1-6 from FINANCE 401 at Bloomsburg University. A worker making $20 per hour decides to take unpaid leave from work to attend a graduation ceremony. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A personal financial plan involves decisions about financial goals and describes the spending, financing, and investing plans necessary to achieve those goals. Study 32 Personal Financial Management Exam 1 flashcards from Hannah C. on StudyBlue. Nancy also has student loans on which she makes monthly payments of $200. Present and future values concepts are applied to which of the following decisions except. Mr. Berkey invests $10,000 in a money market account at his local bank. The tax method that uses the principle of taxing those more who earn more is called ________ taxation. What is Jessie's current net worth? Bloomberg delivers business and markets news, data, analysis, and video to the world, featuring stories from Businessweek and Bloomberg News on everything pertaining to technology Nancy is considering the purchase of a new car, but also is very determined to save at least 50% of any budget surplus each month. Susie wants to know how much she needs to save today to have $5,000 in five years. what are three major money management activities? Personal Financial Management Exam 1 - Finance 1003 with Morris at University of Arkansas - Fayetteville - … use a standard deductions when you do not have enough itemized deductions that add up to an amount larger than the standard deduction. Jerry has assets of $200,000, a net worth of $150,000, and an annual income of $100,000. This is true because. inflation reduces the purchasing power of money, thus reduces savings, Rate of return, inflation, taxes, liquidity, safety, personal- loss of life, loss of income, or unemployment. Created by students for students, Edge-Answers is a sharing tool we use to help each other to pass the Edgenuity and E2020 quizzes and tests. PERSONAL FINANCE Vinay Kshirsagar Omkar Kshirsagar •Planning •Concept •Approach 2. What factors do consumers usually consider when selecting a financial institution to meet their saving and checking needs? The cash in your wallet, your checking account balance, and your savings account comprise your ________ assets. changing interest rates, rising consumer prices and other economic factors. Which of the following is not a tax credit mentioned in the chapter? If Lynn and Robert file a joint return, how many exemptions may they claim? Which of the following does not protect your assets and/or income? Which of the following will not increase your liquidity ratio? Budgeting helps set goals by estimating ________ on a monthly basis to determine how much to save and spend. The time value of money implies that a dollar received today is worth ________ a dollar received tomorrow. Which of the following gross income is not taxable income? 1. What common tax-saving methods are available to most individuals and households? LIST THE SIZ COMPONENTS OF A FINANCIAL PLAN. The state lottery has just informed you that you have won $1 million to be paid out in the amount of $50,000 per year for the next 20 years. In 2012, she sells the stock for $35,000. How many exemptions can he claim on his tax return? What is Jane's gain or loss? Which of the following is not one of these special adjustments? STUDY. An action plan C. A written report, no less than 2500 words, not including the charts and calculations D. A balance sheet 3. In order to take advantage of the time value of money you should do all of the following except. Which of the following is not a decision that you would probably encounter in managing your budget? What are the benefits of an organized system of financial records and documents? Potential investments include all of the following instruments except. Which of the following tables should she use? If your monthly disposable income equals $1,500 and you currently save $500/month, your savings rate is ________. Test your understanding about personal finance planning with this quiz and worksheet. Many individuals tend to ________ their cash inflows and ________ their outflows. From a financial standpoint when should a person start retirement planning and saving? If Bill wants to increase his savings rate by 2% and he currently saves $6,750, how much additional savings will Bill need to contribute to achieve his savings goal of 11%? Personal Finance 3 v.Evaluate job offers vi.Plan for career growth. Learn. rstarcat. Which of the following decisions would involve the use of the present value of a $1 ordinary annuity table? If you are interested in achieving a long-term savings goal, then. Jakob received a $1,000 a year raise in January, sold stocks in March for $6,000 that were originally purchased for $4,000, and in July had a $100 monthly increase in mortgage payments on an adjustable rate mortgage. For each of the following, indicate if the item is a tax deduction or a tax credit. Which of the following can be deducted from your taxes even if you do not itemize? If he has a 15% marginal tax rate and the contribution is tax deductible, Jake will, For qualified individuals, a contribution to a traditional IRA (Individual Retirement Account) is a(n), Reductions of gross income for such items as individual retirement accounts (IRAs), moving expenses, and student loan interest payments will result in, The standard deduction (assuming you are not over 65 or blind) is largest for, The filing status that yields the largest standard deduction per taxpayer is. What is he calculating using his financial calculator? The marginal tax rate is how much of the last dollar you earned goes to taxes. a. 2. Which of the following statements is not true regarding education and financial position? This month Jim has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. During the past year, Fritz spent $3,000 to take a cruise, bought stock costing $5,000 that by year-end had increased to $6,000, and paid off a credit card of $3,500. Study Personal Finance Test 1 (ch 1-4) Flashcards at ProProfs - personal fina nce test ________ are specific expenses instead of a standard amount that reduce adjusted gross income. svanduzer. If you own stock that has increased in price, it would be best to sell it after you have owned it for at least. it consists of assets - liabilities = net worth. Aaron wants to put $200 per month into an IRA account at 15% for four years. Margaret also has a credit card debt of $15,000. Personal financial management is important because it a. controls inflation b. lessens economic differences among individuals c. uses money as an end d. makes personal financial goals easier to achieve ANS: D 2. Comprehensive is a separate coverage from collision. Which of the following is not a cash inflow? Jessie has $4,000 in a bank account, $2,800 in a 401(k) plan at work, a car with a current value of $28,000, and a house that she purchased for $92,000 that has a current value of $118,000. If your income exceeds the amount you spend, you should ________ your investments or ________ loans. Suppose you can earn 1% per month on $1 invested today (this is the stated value or the APR. Cash flows are affected by financial planning decisions. In the balance sheet, a(n) ________ in assets ________ net worth. what are the four methods of managing risks? Learn vocabulary, terms, and more with flashcards, games, and other study tools. What is his net cash flow this month? keeping it the same, expanding on the current situation, changing the situation, or an entirely new course of action. Which of the following decisions would involve the use of the present value of $1? The time value of money can be applied to all of the following except. What is he solving for? Which of the following is not a type of decision to manage your liquidity? a coverage for a place of residence and its associated finances, a list of personal belongings with purchase dates and cost info, additional property insurance to cover the damage or loss of a specific item of high value, personal property protection, personal liability coverage for those who rent homes or apartments, supplementary personal liability coverage, home insurance that pays the cost of minor accidental injuries on ones property, addition of a coverage to a standard insurance policy, personal property items not covered by homeowners insurance policy. they provide a basis for you budget by allowing you to estimate future spending and saving and to form realistic financial goals. What are long-term effects of low savings for both individuals and the economy of a country? Interest earned on municipal bonds b. The higher the rate used in determining the future value of an annuity. 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