Financial Planning discussion questions

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Enfurq_87

Business Finance

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Here is the questions list that you are going to answer.

Ch 4 Questions: 1,3,5,8,9,10,13,14,18,19

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d enterprise, 87 opportunity cost of time, 86 Questions 1. Define the household in financial terms. 2. What makes the household the financial structure for the individual? 3. List some of the advantages and disadvantages of various organizational structures for the individual. 4. How do people choose their goods? 5. How are spending decisions made according to the life cycle theory of savings? 86. What does life cycle theory say a household should have in savings at the end of its life? Is that practical? Explain your answer. 7. Define the term opportunity cost of time. 8. The cost of time is a noncash charge, so why is it important? 9. What makes the household an enterprise? 10. How do finance and economics differ in emphasis? 11. Describe household operations according to household finance. 12. Why is it important to differentiate among the various types of household expendi- tures? V3. Outline the similarities and differences between a household and a business. 14. What is the importance of the theory of financial planning? 15. Are any of the outlays in Table 4.1 preferable to the others? Support your answer. 16. When would it be beneficial for the household enterprise to outsource some activities, for example, cooking? 17. If operating efficiently is the main goal of a household enterprise, are there any draw- backs? 18. What is TPM and why is it valuable in the framework of household planning? 19. What is to be gained by incorporating both theory and practical tools, such as oppor- tunity cost of time, into household planning?
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Question 1
Household – it is defined as an economic unit which is comprises of one or more persons, who
live under one roof, have a source of income and they use the income to meet their needs in
whatever way they deem it fit.
Question 3
Advantages
Matrix organizational structure.
Individuals can work in areas where they are interested in and where they can best perform.
It increases the employee involvement and skills.
Divisional structure
Employees have the capacity to build on their managerial skills.
Employees are able to respond to customers’ needs quickly and with the right personnel expertise.
Functional structure
The employees are able to get clear career trajectory.
Provides efficiency and stability for employees working in the same section.
Disadvantages
Matrix structure
It leads to employee confusion and frustration as a result of unclear reporting lines.
Employees face the challenge of priority setting especially between competing projects.

Divisional structure
The employees tend to be redundant in terms of efforts and competition.
Functional structure
It leads to poor communication among employees hence inter-departmental conflict.
Leads to customer frustration due to lack of corporation for employees.
Question 5
The decisions of spending are made based on the source of income for the household. For instance,
at the initial stages, the household is regarded as a net borrower since they do not have a source of
income and they are dependents. The second stage, the household is regarded as net saver since
they have a stable source of income. The last stage, the household is regarded as the net de-saver
where they consume what they had saved at the second stage because they have no income to
depend on.
Question 8
Resources always cost money and the cost of time is important bec...


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