Ch 2 PMM Personal Finance

The primary goal of financial planning is to

• A) increase earnings.
• B) maximize cash inflows.
• C) maximize wealth.
• D) minimize financial risk.

The personal cash flow statement measures

• A) cash inflows.
• B) cash outflows.
• C) cash inflows and outflows.
• D) All of these are part of the cash flow statement.

The cash flow statement reports a person's or family's

• A) net worth.
• B) current income and payments.
• C) plan for borrowing.
• D) value of investments.

Creating a cash flow statement requires that you determine

• A) all cash coming in for the period.
• B) liabilities.
• C) cash used for expenses.
• D) A and C are both correct.

Which of the following is not a cash inflow?

• A) Interest received
• B) Dividend income
• C) Car payment
• D) Salary

Cash inflows can include

• A) dividends.
• B) interest income.
• C) income.
• D) All of these are cash inflows.

Which of the following is not a cash outflow?

• A) Salary
• B) Rent
• C) Telephone bill
• D) Car payment

 The main source of cash flow for most people is

• A) salary and wages.
• B) dividends.
• C) interest.
• D) parents.

Cash inflow can be increased by all of the following, except

• A) making credit card payments.
• B) working overtime.
• C) selling stock.
• D) getting a second job.

The only sources of cash outflows for most people are

• A) mortgage or rent payments.
• B) car payments.
• C) college loan payments.
• D) Every expenditure is a cash outflow.