After Reviewing Brenda's Current Financial Situation, Ronald, Her Friend, Assesses

question 113

Multiple Choice

After reviewing Brenda's current financial situation, Ronald, her friend, assesses that she has an unpaid credit card balance of $4,500, on which an annual percentage rate of 15% is applicable. In this case, the best advice that Ronald can give Brenda is to:

• A) increase the annual percentage rate on her credit cards.
• B) switch credit card companies as many companies offer benefits such as frequent-flier miles.
• C) keep using the card and not to worry about the balance because all interest is tax deductible.
• D) place a high priority on eliminating her credit card balance as quickly as possible.

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Definitions:

Target Profit

The amount of net income a company aims to achieve for a specific period by setting certain sales targets and cost controls.

Monthly

Pertaining to something that occurs, is done, or calculated on a month-to-month basis.

Unit Sales

The total number of individual units of product sold by a company during a certain period of time.

Target Profit

The desired net income a company aims to achieve within a specific period, often used for setting sales targets and pricing strategies.