Revision
Joe is trying to decide whether to buy a new car or go to America on his holidays. He decides to buy the car.
What is the financial cost and what is the opportunity cost?
Holiday - Opportunity
Car - Financial
Explain impulse buying
The buying of goods without planning to do so in advance,
Definition of a monetary reward?
A monetary reward is a payment or compensation given to individuals, often employees, in the form of money or its equivalent.
The O'Brien Family plan on saving 25% of their money for the month and spending the rest.
They had income of €5,000 how much did they save?
€1,250
What is Fixed expenditure?
Fixed expenditure is regular spending where the amount is the same each time
Jim is trying to decide whether to buy a pair of shoes or get credit for his phone. He decides to buy the shoes.
What is the financial cost and what is the opportunity cost?
Financial - Shoes
Opportunity - financial
Two methods companies use to aid impulse buying
create urgency, strategic displays, advertising, highlight limited stock
Definition of a benefit in kind?
Any non-cash benefit of monetary value that you provide for your employee
The O'Brien Family plan on saving 35% of their money for the month and spending the rest.
They had income of €9,000 how much did they save?
€3,150
What is irregular expenditure?
Irregular expenditure is where the amount or timing varies
Give a suitable source of finance to get to use for an extension to a company
Loan
Suitable source of finance for a house
Mortgage
Example of monetary reward.
Wages, commission, bonus
The O'Brien Family plan on saving 25% of their money for the month and spending the rest.
They had income of €5,000 how much did they spend?
€3,750
What is Discretionary expenditure?
Discretionary expenditure is non-essential spending on wants rather than needs
Suitable source of finance for a car
Hire Purchase
Suitable source of finance for groceries
Wage/Salary
Example of a benefit in kind
Company Car
The O'Brien Family plan on saving 21% of their money for the month and spending the rest.
They had income of €7,500 how much did they save?
€1,575
Name 2 factors an insurance company will take into account when calculating car insurance
Age
Car Model
What is a global brand? Give an example
A brand that is sold and known around the world
What is meant by indemnity?
means that a policyholder is compensated for a loss, restoring them to their original financial position without making a profit
What is Utmost good faith
means that both parties to an insurance contract have a duty to act with the highest level of honesty and transparency
3 sources of household income
Wage
Loan
Grant
3 types of insurance a family might purchase
Car, House, Health