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Unformatted text preview: BUSA 3000 COMPREHENSIVE EXAM REVIEW MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements applies to obtaining an undergraduate college degree? 1) _______ A) They are expensive and rarely pay off in increased earnings. B) It may be the single best investment you will ever make. C) Seventy percent (70%) of wealthy householders had earned a college degree. D) There is no relationship between personal wealth and earning a college degree. E) both B and C above 2) In Chapter One, Principle Three deals with the time value of money. Why is this principle so important to financial planning? 2) _______ A) It helps us determine our savings needs today in order to meet our retirement goals. B) It allows us to determine how much money we will need to achieve our future goals. C) It shows us the impact of inflation on our money over time. D) It shows us how important time and interest rates are in accumulating wealth. E) all of the above are important in financial planning. 3) What piece of advice might you give to someone for whom savings is a residual? 3) _______ A) money isn't everything B) pay yourself first C) don't put all your eggs in one basket D) none of the above 4) Suppose that Cheryl's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. Her only liabilities are a student loan balance of $2,000 and a balance of $8,000 on her car loan. What is her net worth? 4) _______ A) $10,000 B) $8,000 C) $5,000 D) $2,000 E) none of the above 5) A(n) ________ is a book or notebook set aside to record expenditures. 5) _______ A) income statement B) ledger C) blue book D) cash budget E) none of the above 6) Suppose that you were trying to determine how much income was available for future monetary needs as well as for investment. You would most likely use which of the following ratios? 6) _______ A) total asset turnover B) savings ratio C) current ratio D) debt ratio E) none of the above 7) A compound annuity uses the principles of 7) _______ A) reinvesting and compound interest. B) compound interest and present value. C) compound interest and future value. D) amortization and reinvesting. E) reinvesting and present value. Arnold Diaz Arnold learned something very valuable as a teenager from his dad. He was told to invest $1,000 at 12% interest at age 20 and leave it alone until age 65. Arnold's dad knew that one strategy that wealthy people use is to exercise self- discipline to never touch this long- term plan. Arnold is very happy he applied his dad's advice.term plan....
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- Spring '11