Describe how personal loans affect your personal budget, income statement, and balance sheet. Has credit allowed you to expand your purchases?
What will be an ideal response?
Answer: This is a basic subjective answer. Interest expense on credit reduces wealth. However, purchases on credit allow you to purchase more assets. Loans are easy to obtain when collateral is available. Additional purchases need to be in the budget.
You might also like to view...
Isabelle's Furniture manufactures a small table and a large table
The small table sells for $700, has variable costs of $560 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,600, has variable costs of $970, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either product, and the company could choose any proportions of product mix that they wanted, what is the optimum product mix to maximize operating income of the company? A) 500 units of small and 625 units of large B) 0 units of small and 625 units of large C) 625 units of small and 500 units of large D) 500 units of small and 0 units of large
Which of the following is NOT a major subaccount of the Balance of Payments?
A) the financial account B) the accounts payable C) the capital account D) the current account