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Linda and Paul Sanders live in their own home with their two children - Leaving Cert Business - Question Question 1 - 2014
Question Question 1
Linda and Paul Sanders live in their own home with their two children. Linda works as an Office Manager in a large printing company. Paul is a Sales Representative f... show full transcript
Worked Solution & Example Answer:Linda and Paul Sanders live in their own home with their two children - Leaving Cert Business - Question Question 1 - 2014
Step 1
Outline two types of insurance the Sanders household might have.
Answer
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House/Building Insurance: This insurance provides compensation or protection against damage to the structure of the house due to events like fire, flood, or storms.
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Contents Insurance: This type of insurance covers the loss or damage to personal belongings within the house, such as furniture and electronics, from risks like theft or fire.
Step 2
Outline two reasons why the Sanders household would prepare a Household Budget.
Answer
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To Manage Income and Expenditure: By preparing a budget, the Sanders household can clearly see their incoming funds versus their outgoing expenses, allowing them to manage their finances effectively.
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To Plan for Savings and Avoid Debt: Creating a budget will help the Sanders family identify areas where they can cut back on spending, enabling them to save money for future needs, such as the purchase of a second car.
Step 3
Outline two factors the Sanders household must consider before taking out a medium term bank loan.
Answer
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Loan Repayment Terms: The Sanders family should evaluate the interest rates and repayment period of the loan to ensure it fits within their budget without causing financial strain.
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Current Financial Obligations: It’s crucial for the family to consider their existing debts and monthly expenditures, such as their current overdraft, to ensure they can afford the additional loan payments.
Step 4
Explain three features of a Current Account.
Answer
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ATM/Debit Card Access: A current account usually comes with an ATM or debit card, enabling account holders to withdraw cash and make purchases easily.
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Overdraft Facility: Many current accounts offer an overdraft, which allows users to spend beyond their account balance to manage expenses.
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Online Banking: Current accounts often provide online banking facilities, where users can manage their finances, pay bills, and view transactions conveniently.
Step 5
Outline one similarity and one difference for Linda between managing her office and managing her home.
Answer
Similarity: Both roles require effective planning of cash flow, where Linda must outline income sources and anticipate expenses to maintain financial stability.
Difference: Managing her office involves navigating complex business regulations and responsibilities, while managing her home is more focused on personal budgeting and family needs.