Bus. Eng. 3 Final Exam

Which of these costs would be the MOST difficult to adjust if you were to reduce your expenses?

• Dining out at local restaurants

• Loan payment on a new car

• Expenses for new clothes

• Postponing a purchase for a big-screen TV

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You then set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months

• 1 year

• 2 years

• 3 years

Which of the following would be a sign that you have a budget deficit?

• Your savings account balance grows every month

• You overdraw your checking account on a consistent basis (with a $34 cost per overdraft)

• Your checking account balance grows every month

• You pay more than the minimum monthly loan payment towards your student loans

While shopping for groceries you are comparing the cost of three kinds of cereal that you like: Cereal A costs $3.20 for a 16 oz. box; Cereal B costs $5.00 for a 32 oz. box; Cereal C costs $2.50 for a 10oz. box. Rank order the options from lowest unit cost to highest unit cost.

• B, C, A

• A, B, C

• B, A, C

• C, B, A

Greg is trying to decide whether he needs a car or not when he moves to the city. Which of the following would convince Greg to get a car rather than use public transportation?

• There are several public transportation routes between Greg's apartment and work.

• The cost of public transportation is less than Greg's monthly car payment.

• Greg's company covers half the cost of his monthly public transportation pass.

• Using public transportation, Greg's commute to work one-way is two hours.

You are putting together your first post-graduation budget. Your take-home pay will be $2500 per month. You estimate your monthly costs to be rent of $800, car payment of $350, car insurance of $150, car maintenance of $50, entertainment of $500, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $100 and other expense of $300. How would you describe your budget after analyzing all of your income and expenses?

• You have a surplus of $175

• You have a deficit of $175

• You have a deficit of $2,675

• You have a surplus of $2,500

Isaiah works for the summer at a technology company and has a salary for the summer of $3,000. After federal and state taxes and Social Security/Medicare taxes are deducted, his take-home pay is $2,500. Which of the statements below is correct?

• His gross pay is $2,500 and his net pay is $3,000

• His gross pay and net pay are $3,000

• His net pay and gross pay are $2,500

• His gross pay is $3,000 and net pay is $2,500

What is renter's insurance?

• A one-time fee you pay when you sign your lease.

• A monthly payment to get liability insurance and to insure your belongings in your apartment in case of fire, theft, etc.

• A one-time fee you pay to the bank to cover the cost of processing your rent each month

• A monthly payment to cover the cost of any damages to the apartment in case of fire, theft, etc.

Which of the following is a BAD budgeting strategy to use if you want to save money at the grocery store?

• Prepare a grocery list before you go to the store, and avoid buying items that aren't on the list

• Build a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat

• When comparing similar products, focus on the price only

• When comparing similar products, be sure to compare based on unit price

You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Mark which of YOUR expenses would likely decrease by having roommates.

• Groceries and eating out

• Rent

• Cell phone bill

• Bedroom furniture