6. Consumer Skills

Financial Decision Making — Quiz

Test your understanding of financial decision making with 5 practice questions.

Practice Questions

Question 1

Which of the following is an example of a sunk cost in financial decision making?

Question 2

You are considering purchasing a new smartphone for $800 or repairing your current phone for $200. If the new phone is expected to last 4 years and the repaired phone is expected to last 1 more year, what is the annualized cost of each option?

Question 3

Which of the following is an example of a qualitative factor in financial decision making?

Question 4

You are deciding between two financial options: Option A costs $1,000 today and will save you $150 per year for the next 10 years. Option B costs $1,500 today and will save you $200 per year for the next 10 years. If the discount rate is 5%, which option has the higher net present value (NPV)?

Question 5

Which of the following best describes the concept of marginal benefit in financial decision making?