Which of the Following Decisions Is Not Financially Sound

question 97

Multiple Choice

Which of the following decisions is not financially sound?

• A) Defer your student loan payments with no interest accruing
• B) Defer your student loan payments if the interest rate is 7% per annum
• C) Take a 60 month zero interest rate car loan
• D) Prioritize paying off the highest interest rate loans versus lower rate loans

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Definitions:

IFRS

A set of accounting standards named International Financial Reporting Standards, developed globally by the International Accounting Standards Board (IASB).

Expensed

Refers to the accounting practice of recognizing a cost as an expense in the income statement in the period it is incurred.

Maintenance

The process of preserving a condition or situation or the process of keeping something in working order by regularly servicing it.

Non-interest-bearing Note

A promissory note or loan agreement that does not accrue interest over time, requiring the borrower to repay only the principal amount.