Personal Financial Management - Chapter 5 Flashcards Preview

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Flashcards in Personal Financial Management - Chapter 5 Deck (21)
0

Annual percentage rate (APR)

Cost of borrowing money on an annual basis

1

Buyers remorse

Regretting a purchase soon after making it

2

Brand recognition (2)

Consumer awareness that a particular brand exists

Part of product positioning

3

Financing (2)

To buy an item with credit; borrowing money

Paying overtime

4

Finite

Having a beginning and an end

5

Impulse purchase

To buy an item without thinking about it

6

Opportunity cost (2)

True cost of something in terms of what you have to give up to get the item

The benefits of what you would have had by taking the other action

7

Rule of 78 (2)

Pre-payment penalty in a financing contract

The portion of "90 days same-as-cash" agreement that states the entire loan amount plus the first 90 days becomes due immediately

8

Significant purchase

An amount of $ you spend, usually $300 or more, that causes some pain to part with

9

Seek wise

Counsel

10

Wait ____ before making a major purchase

Overnight

11

The # of advertisements a person views daily?

3,000

12

Buyer beware

Caveat emptor

13

Branding

Creates consumer awareness for a trademark or product

14

Necessities (4)

Utilities

Groceries

Housing

Transportation

15

How does advertising affect your buying decisions? (3)

Branding
Shelf positioning
Color

16

5 steps to follow before making a significant purchase (5)

1. Wait overnight
2. Consider buying motives
3. Don't buy anything you don't understand
4. Consider opportunity cost of $
5. Seek wise counsel

17

Marketing tools (4)

Personal selling

Financing

Tv, radio, Internet, and over social media

Product positioning

18

Product positioning (4)

Brand recognition

Color

Shelf position

Packaging

19

what % of "90 days same-as-cash" contracts convert to payments?

88%

20

"90 days same-as-cash" contracts are usually at what % APR with Rule of 78's pre-payment penalty

24%